What does Bridging Loan mean?

It is a type of loan which is recommended for those who need to have access to cash in order to buy a property, but their old property/house is not yet sold. This bridging loan comes to cover for that period, until the old property/house is being sold. Thus, it is only a short term solution, and is not recommended for other situations.

There are several risk factors which one should take into consideration before contracting a bridging loan, such as the case when the property is not sold on time, and then the individual has to repay the bridging loan. Also, given the apparently advantageous sides of a bridging loan, this can actually hide very high Annual percentage rates or interest rates which might be not so convenient after all.