What are the interest options for bridging loans?
There are generally two interest payment options available for bridging loans:
- Rolled-up interest: With this option, the interest charges are added to the loan amount and are not paid back monthly. Instead, the borrower repays the total amount of the loan plus the accumulated interest at the end of the loan term. Rolled-up interest can be helpful for borrowers who need cash to make monthly interest payments.
- Monthly interest payments: With this option, the borrower makes monthly payments to the lender, similar to a traditional loan. This can be useful for borrowers who have the cash flow to make regular payments and want to reduce the overall interest charges.
It’s essential for borrowers to carefully consider their interest payment options and work with their lender or broker to determine which option is best suited for their financial situation. Borrowers should also consider the overall costs of the loan, including any fees, before deciding on an interest payment option.
How can Sterling Commercial Finance Help?
At Sterling Commercial Finance, we’ve been helping businesses access funding for over 20 years. Get in touch with the team today to see how we can help your business.