Bridge loan repayment


I am planning to take up a bride loan. I have been told I can repay in multiple ways. What are my options?


You can repay your bridge loan in two ways. Either you can pay an equated monthly installment on your loan amount or you can pay interest on the loan amount till the time the property is disposed off. Being a short term loan, the interest rates for bridge loans are higher than normal home loans.


Hi Reba,

Bridge loans are short-term loans given to meet short-term liquidity requirements of companies. These are loans that usually have a tenure of up to a year. Some banks do offer this for up to 3 years. These loans are given against securities such as Non-Convertible Debentures (NCD) and Global Depository Receipts (GDR). The repayments will be similar to any other loan. Note that some banks offer ‘bridging loans’. These loans are given when you want to buy a new home while waiting to sell your old home. Here, you have easy repayment options wherein the EMI is charged at simple interest rates and you can repay the principal as a lump sum as your loan comes to a close. Most banks don’t have prepayment charges for such loans. As far as we know, there are multiple payment options just like any other loan and will include cheque and auto debit.

BB Expert


Hey Reba,
Hope you’re doing well…

Bridging is a flexible form of funding and offers multiple ways of servicing interest payments. Interest can be serviced monthly by direct debit like a regular mortgage, or interest can be calculated for the total term of the loan and deducted from the gross loan so no interest payments will then be necessary, or interest can be rolled up each month into the borrowing facility and the total repaid upon redemption.