What are the advantages and disadvantages of a bridging loan?
What are the advantages and disadvantages of a bridging loan?
Before you apply for a bridging loan, make sure you weigh the advantages and disadvantages.
Advantages of bridging loans
- You can borrow the money immediately to keep your real estate dealon pace.
- It is feasible to take out quite substantial loans.
- The payback terms can be adjusted to meet your schedule.
- It is feasible to obtain financing for properties that are not approved by conventional lenders.
Disadvantages of bridging loans
- Bridging loans are secured loans, which means you'll have to put up an asset as collateral. If you can't repay the bridging loan, you risk losing that asset, such as a home.
- You pay a higher interest rate for the convenience of quick, flexible financing.
- The cost of bridging loans can be increased by a variety of expenses.
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