When it comes to caveat loan [which is also termed as bridging loan], you need to be more careful and attentive. When it comes to the financial sector, anything could change at the blink of an eye.
As the name itself suggests, this kind of loans fills the gap between current and the future obligation. Caveat loan is a short term loan taken to clear the current obligation by paying high-interest rate. Sometimes some collateral security is taken to make sure that the repayment of the loan will be received in some other ways.
This was started back in the year 1960 and now has gained many buyers, followed by a significant rise in the number of lenders. There are many people who set an example in the finance field, for instance, Richard Butler Creagh (a person who built his own company with a lot of hard works in north-west London).
One of the shortcomings people find while applying for a bridge loan is the high-interest rate aspect as compared to conventional loan interest rate. But to overcome this con, there are various pros of it such as:
Quick functioning –
The most essential and highlighting benefit of this is the fast cash flow. Fewer documents are required to access the loan. As compared to conventional or mortgage loan, you will be able to receive the loan within a few days of completion of all the procedure.
Less complexity, more flexibility –
You can use the loan to buy a property, to repay a loan or for any other financial reason. There is no limitation regarding the purpose of taking a loan. The proof of income or the credit sources are given second priority, and the main focus is the provision of collateral.
Suitable for buying property –
This is the kind of loan which is preferred by the buyers when they desire to buy a property as the procedure is fast-paced. You can buy the property against your current one.
This short term loan can be paid back within a period of 12 months. This loan is safer than it sounds and has a lot more advantages.