Many people move to a new home as if their needs change. If your family grows and your income rises, you may sell your current HDB BTO apartment and move into a larger HDB or private home.
You might, however, find yourself in a situation where you lack the funds necessary to purchase your new home because you haven’t received the proceeds from selling your previous property. In these situations, you can apply for a bridging loan to help you bridge the gap and smoothly transition to buying your new house.
A bridging loan could be the best way to close a financial gap in Singapore. Bridging loans provides a quick and flexible option to obtain finances, whether waiting for a paycheck, managing unforeseen needs, or moving between houses. Golden Credit offers customized financial solutions, such as short-term bridging loans, to simplify navigating life’s challenges.
This blog will discuss bridging loans, their operation, and the reasons they could be the ideal means of financing for you. Let’s get started!
What is a Bridging Loan in Singapore?
Suppose you are planning to purchase a new home and want to use the funds generated from selling your old flat. However, even after selling, you don’t have enough funds to purchase a new property immediately.
While waiting for the sale proceeds, the time to pay your new property’s downpayment is ticking, leaving you in a distressing situation. This is where a bridging loan comes in handy.
A bridging loan is a short-term loan that “bridges” the financing gap between selling your old property and securing a new one. This type of loan enables you to make the necessary payments on your new and/or existing property.
Many banks in Singapore offer loans for HDB and private property. You can use the loan for the downpayment and other initial expenses before selling your old property.
It is best to seek the loan from the same source (bank) as your home loan. Note that a bridging loan is only for people with a property to sell and buy and must be taken with a new home loan.
Key Features of Bridging Loans
- Temporary fix: Usually paid back in a year or a few months.
- Fast approval: Funds are disbursed rapidly, usually in a day or two.
- Flexible usage: For various uses, including business expenses, bill payments, and real estate purchases.
We at Golden Credit know that money problems don’t wait. To keep you afloat in trying times, we provide bridging funding options.
What types of bridge loans are available in Singapore?
- Closed Bridge Loan
Lenders favor closed bridge loans because they offer greater certainty of loan repayment. These loans are available for a predetermined time frame that both parties have agreed on. They have lower interest rates than open bridging loans. However, the financial penalties for breaking the terms of a closed bridge loan can be far more severe.
- Open Bridge Loan
In contrast, open short term loan like bridge loans generally have no fixed pay-off date and, as such, higher interest rates. Sometimes, lenders deduct the loan interest from the loan advance to ensure the security of their funds. This type of bridge loan is preferred by borrowers uncertain about securing future finances.
As is self-evident, open bridge loans are less common than closed bridge loans.
How Does a Bridging Loan Work?
A bridging loan in Singapore works by providing you with immediate cash flow to cover your expenses. Once your expected funds arrive (e.g., salary, property sale proceeds, or business revenue), you repay the loan and the agreed bridging loan interest rate.
Steps to Secure a Bridging Loan
- Evaluate Your Needs: Find out how much and for how long you need funding.
- Apply to a Moneylender Who Is Licensed: Pick a reputable company like Golden Credit for dependable and transparent service.
- Send in the necessary documents: Provide proof of identification, income, and other required documentation.
- Get Money: Get your money fast—often in a day.
- Pay Back the Loan: After stabilizing your financial circumstances, pay back the loan plus interest.
What are the Advantages of a Bridge Loan?
The advantages of bridge loans are that they are aplenty compared to other financing options because they provide the cheapest option for securing immediate cash flow, are fast to arrange, have flexible lending criteria, and can be secured on any real estate. While buying real estate, such loans help buyers by removing the contingency to sell first. So buyers can put their homes on the market and wait for a good deal while buying without restrictions. Additionally, such loans typically don’t require repayments for the first few months, giving borrowers time to put their house in order.
Companies typically qualify for a bridge loan much more easily than other long-term financing options. Moreover, bridge loan lenders often customize short-term loans like bridge loans to suit businesses’ various needs, so companies usually have several options.
So the advantages of bridge loans can be summarized as follows:
- Fast to arrange: Compared to traditional long-term financing measures, closed bridge loans can be arranged in as little as 48 hours.
- Flexible lending criteria: Generally, bridge loan lenders only consider the value of the collateral and the borrower’s exit route when making loans. They don’t worry about traditional loan-giving benchmarks, such as income, affordability, and credit history.
- Any kind/type/state/standard of property can be the collateral: Freehold, cross lease, leasehold—both long and short, free-standing houses, apartments, flats, shops, warehouses, mixed-use properties, care homes, farms, leisure complexes, building plots, development land, etc. Lenders will be willing to take that as collateral if you think of any kind and type of real estate and bridge loans.
Even properties in poor condition, derelict, or needing major restoration, as well as those with non-standard construction, are generally acceptable, which is not the case with a traditional mortgage provider.
Finally, it pays to note a few risks associated with bridging finance, which is all market-dependent, especially when the bridge loan is taken to purchase a new house, putting the existing home as collateral. These include a delay in selling the current house, keeping up with two loan repayments for such a period, and when the current house finally sells, it does so at less than what you expected. This implies that you might accumulate more debt than you anticipated.
Therefore, when considering getting a bridge loan, it’s always a good idea to research and consult with bridging finance specialists.
When Should You Consider a Bridging Loan?
The Singaporean bridging loan is perfect:
- Property Buyers: Bridge the gap between selling your current home and purchasing a new one.
- Owners of businesses: Control cash flow during lean times or unforeseen costs.
- Individuals: Take care of urgent financial obligations, health care costs, or other personal requirements.
A short-term bridging loan can help if you’re experiencing a brief financial gap.
Why Choose Golden Credit for Your Bridging Loan Needs?
At Golden Credit, we pride ourselves on being a trusted and licensed moneylender in Singapore. Here’s why we stand out:
- Fast and Efficient Service: We understand that emergencies require immediate attention, so we ensure quick approval and disbursement of funds.
- Transparent Terms: With Golden Credit, there are no hidden fees or surprises. We provide clear information about our bridging loan interest rates and repayment terms.
- Personalized Solutions: Every financial situation is unique. We take the time to understand your needs and offer tailored bridging funding solutions.
- Licensed and Reliable: As an IPTO-licensed moneylender, we adhere to strict regulations to ensure your safety and satisfaction.
How to Apply for a Bridging Loan with Golden Credit
Applying for a bridging loan in Singapore with Golden Credit is simple and hassle-free. Follow these steps:
- Visit Our Website: Head to Golden Credit’s official website to learn more about our services.
- Contact Us: Contact our friendly team via phone or email to discuss your needs.
- Submit Your Application: Provide the necessary documents for quick processing.
- Get Approved: Receive approval within hours and access your funds immediately.
Tips for Managing Your Bridging Loan
To make the most of your temporary bridging loan, keep these tips in mind:
- Plan Your Repayments: Ensure you have a clear repayment strategy to avoid unnecessary stress.
- Compare Interest Rates: Choose a lender like Golden Credit that offers competitive bridging loan interest rates.
- Use Funds Wisely: Allocate the money to your most pressing needs to maximize its impact.
Take Control of Your Finances with Golden Credit
Life is full of surprises, and financial emergencies can happen to anyone. With a Bridging Loan in Singapore from Golden Credit, you can bridge the gap between your current situation and a brighter financial future.
Don’t let temporary setbacks hold you back. Contact Golden Credit today to explore your bridging funding options and take the first step toward financial stability.
Ready to secure a Bridging Loan in Singapore? Trust Golden Credit to provide fast, reliable, and affordable solutions tailored to your needs. Visit our website or call us now to get started. Let us help you bridge the gap and achieve peace of mind today!
By choosing the best licensed money lender like Golden Credit, you’re not just getting a loan – you’re gaining a trusted partner committed to your financial well-being. Act now and take control of your finances!
