Bridging loans are specially designed for Singaporeans who want to purchase a new property, like a house or flat, but need to borrow additional capital to fund the purchase. These loans can help you bridge a financial or working capital gap when upgrading or moving home – but there are a few things you need to be aware of.
- Loan amount up to 6 times of your salary
- Exercised the Option to Purchase (OTP)
- Low interest from 1 to 4%
How Can Moneylender Review Help?
Moneylender Review can assist you in borrowing the money or working capital you need to complete your sale and purchase, usually with a flexible loan amount and competitive interest rates.
We can help you determine which type of loan best meets your temporary borrowing needs. If you compare loans using our loan application tool, you can review all options alongside each other and get one step closer to bridging loan approval in minutes.
Are Bridging Loans a Good Idea?
Getting the right bridging loan can be the fastest and easiest way to make your dreams come true.
The application process is straightforward and you can expect to pay a favorable interest rate and can pin down the right deal with the right money lender.
How Many Types of Loan Are There?
There are ordinarily two types of bridging loan you can apply for in Singapore – so, let’s compare them.
Capitalized Interest Bridging Loan
For this type of loan, you won’t pay a penny until your old property has been sold. In this case, the bank will cover the full amount of the new house. Interest will accrue on your borrowed money over the period of your loan and you will have to repay both the principal loan amount and the interest.
Simultaneous Repayment Bridging Loan
Another option is a “simultaneous” loan designed for homeowners who want to pay off a home loan and bridging loan at the same time. With this type of loan bridging finance, you must sell your original property within a maximum of one year, which gives you a little less time, but may be a better solution for those expecting a quick sale.
It always pays to compare the best options from the best licensed money lenders using Moneylender Review.
How to Apply for a Bridging Loan?
Regardless of which loan option you choose, you will need the Option to Purchase (OTP) for your current flat or house in order to apply. You can apply either directly through individual moneylenders or by using a first-rate service like Moneylender Review to compare the best bridging loans on the market to fund your renovation-related expenses.
- At least 18 years old
- Exercised the option to purchase (OTP)
- Have a minimum salary of $1500
- Identity card
- Proof of residence
- Proof of employment
- Recent 3 months payslip
- SingPass to log in to CPF, HDB, and IRAS
- Copy of the OTP
How Fast Can I Get My Loan Approved?
With most money lenders, you can expect a loan approval within an hour you apply, with funds disbursed as soon as you sign the agreement in-person.
Can I Get a Combined Loan with My Spouse?
Yes, you can pursue a joint scheme – but usually only if one or both of you is a Singapore citizen.
How Much Can I Borrow with a Bridging Loan?
In most cases, banks can let you loan between 15 and 20% of the total price of your new property – but some money lenders and/or banks may let you take out 25%.
Moneylenders let you borrow up to 6 times of your monthly income if your annual salary is at least $20,000. Rest assured that you can still take a loan if your annual income is less than the said amount.
What Is the Interest Rate on Bridging Loans?
You will usually get an interest rate of between 5 and 6% with banks. Moneylenders’ interest rates remain the same, from 1 to 4% per month.
Other Things to Know Before You Get Your Loan
Before you get seeking approval on those funds, here are a few extra things you should know about the process.
Your Property Will Be Collateral when you opt for banks
Your bank will use your property as collateral, which means you do potentially run the risk of losing your home if you are unable to keep up with monthly repayments. Note that moneylenders don’t require collaterals.
You Need a Reliable Property Valuation
Check the accurate market value of your sale property, which will depend on various things, such as its location, how old it is and whether it is hassle free for the new buyer in terms of maintenance and repairs. Overestimating its value can cause big problems.
What Happens if There’s a Problem with the House Sale?
If your buyers back out too late in the day, this could cause a serious problem. Once you’ve found your perfect bridging loan, be sure to check with your money lender what might happen in a worst-case scenario.
What is the Cheapest Bridging Loan on the Market?
This will change from day to day – so use Moneylender Review’s comparison tool to compare money lenders and find out!
How Much More Will a Bridging Loan Cost Me?
Our loan comparison tool can help you see the cost differences between moneylenders’ loans, but it always pays to get a mortgage broker to crunch the numbers for you too.
What Are the Repayment Terms and Fees?
Banks’ loan tenure for bridging loans is usually up to only 6 months. Fees include early and repayment fees.
Moneylenders’ repayment terms range from 1 month or until your property completion date, subject to the terms and conditions of the agreement. There is a one time processing fee and late fee if you are late for your repayment.
Get Your Perfect Bridging Loan Now
No matter how old your home, how bad your credit history or how long you expect your house sale to take, there’s always a financial option available to suit you.
Compare maximum bridging loan amounts, rates and approval processes between licensed money lenders now.