How to Get Cash Bridge Loans in Australia

Are you planning to get a bridge loan? Bridge loans are great in helping you with your financial needs in moving from your old home to a new one. It bridges the gap between when a cash demand is made and when long-term financing or an existing obligation is available.

Cash bridge loans are secured by the equity in the borrower’s current home, even if it’s for sale. The loan amount is determined by the difference between the home’s value and the mortgage balance. It’s then used for the down payment on the new home.

In this article, we’ll talk about the types of bridge loans and the step-by-step process of applying for one in Australia.

What this article covers:

Types of Cash Bridge Loans

Australia mainly has two types of bridge loans: closed and open. You can get these on payday or before pay loans.

Closed Bridge Loan

It’s typically used when a borrower has already exchanged contracts on the sale of their existing property and has a specific exit date agreed upon. This type of loan is easier to obtain than an open bridge loan, as the lender knows the borrower has a clear plan to pay off the loan.

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Open Bridge Loan

It’s used when a borrower has not yet sold their existing property. This type of loan doesn’t require an exit strategy but has a certain time when you must repay the full amount.

This type of loan is more difficult to obtain than a closed bridge loan, as the lender is not assured that the borrower will be able to pay off the loan.

Both loans are considered loans now pay later.

Steps Needed

Follow this step-by-step guide to get the loan you’ve been longing for.

1. Determine Your Financial Requirements

Before applying for the loan, you must determine how much money you need and when you need it. This will help you determine the terms of the loan.

Most lenders of direct finance loans have calculators on their websites. You’ll see the overall interest and other charges of the amount for which you’re applying.

2. Find a Suitable Lender

Research the different lenders in your area and compare their interest rates, terms and conditions, and fees. Only choose a lender on the ASIC Connect registry with certifications, awards (if possible), and a good reputation. 

If you don’t know where to start, rely on loan finders like Orange Loans. 

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3. Submit Your Loan Application

Once you’ve found a suitable lender, submit your loan application. You’ll need to provide proof of income, assets, and other financial information. Your lender will then evaluate your application and determine if you qualify for a bridge loan.

Some lenders offer no paperwork loans. This might not technically be “zero documents,” but you’d submit fewer documents than other bridge loans. 

4. Provide Collateral

A cash bridge loan is often secured by collateral, such as real estate or other assets. You’ll need to provide proof of ownership of the collateral and its value.

5. Review and Sign the Loan Agreement

If your loan application is approved, your lender will provide a loan agreement outlining the terms and conditions. Review the contract carefully and sign it if you agree to the terms.

6. Receive Your Loan Funds

Once you’ve signed the loan agreement, the lender will transfer the funds to your bank account. You can then use the funds to bridge the gap between your immediate financial needs and long-term financing.

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Conclusion

Getting a cash bridge loan in Australia can be a great option, but these are hardmoney loans. It means you’ll risk losing your property if you fail to repay the loan.

There are also bridge payday loans you can avail of, which work similarly to a bridge loan but through a payday loan.

Either way, ensure you can afford a bridge loan to avoid significant losses.

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