A bridge loan is a kind of short term loan, which can generally be paid off in a year. The purpose behind taking a bridging loan is to meet the expenses of the borrower, unless a long term funding is obtained. With the help of Bridging loans a borrower can have an instant cash flow to pay off several unexpected financial obligations, when awaiting the approval of contracts or standing deals. Generally, the interest rate of the bridging loans is very high and it may be secured against any kind of collateral. Basically, for several financial problems and situations people take bridging loans. Sometimes, it takes a longer period of time for the equity financing deals to be completed. In such a situation, business owners may take bridge loans to finance the requisite working capital of their business. There are also some other usages of bringing loan. One can take bridging loan when planning to sell their home. Since, in some areas, the real estate market move very slowly sometimes, or it may be very difficult to sell a home, so in this situation, one can resort to bridging loans. Besides, those who, buy a new home before selling the existing habitat can resort to bridging loan to purchase their expenditure and monetary obligations till the dealing as to the selling of their home is finalized. This kind of loan may also be taken to be used as "chain breaking". This means that a borrower can use it to buy a new home even when their old home is still on the market. To defend or perk up the credit record, Bridge loans are commonly used. An outstanding debt may be repaid by using a bridge loan. This helps borrowers to build up a good credit which will enable them to apply for other loans that are more permanent and larger in amount. Sometimes bridge loans benefit people even when they change their location and shift to a new place because of a new job. As because of collateral backing, the high interest rates, and short duration, Bridging finance may be done in less than a day. So it may be said that Bridging finance is a loan in need and proves a great boon for people. It gives a great relief to them by helping them manage their current financial needs until some big amount comes their way.
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