🧾 Common Use Cases
🏡 For Individuals:
Buying a new home before selling the old one
E.g., You want to buy a ₹60 lakh house but haven’t yet sold your current one. A bridge loan helps you cover the cost temporarily.
🏢 For Businesses:
Covering cash shortfalls while waiting for long-term funding
Real estate developers awaiting project sales or long-term loans
Startups waiting for venture capital or loan sanction
Project finance gaps (between phases)
✅ Advantages
💸 Fast disbursement of funds
🔄 Helps maintain liquidity in transition periods
💼 Enables businesses to seize time-sensitive opportunities
🏠 Lets homebuyers avoid delays or property loss
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⚠️ Disadvantages
📈 High interest rates compared to term loans
💰 Often includes processing fees and penalties
⏳ Requires strict repayment discipline
🔒 Generally requires collateral (property, shares, etc.)
🏦 Who Offers Bridge Loans?
| Institution Type | Example/Use Case |
|---|---|
| 🏦 Banks | SBI, ICICI, HDFC – for real estate and business |
| 🧾 NBFCs | Bajaj Finserv, Tata Capital – quicker processing |
| 🏘️ Housing Financiers | HDFC Ltd, LIC HFL – for homebuyers in transition |
| 💼 Private Lenders | Used in urgent or niche business transactions |
🧠 Example
A real estate developer has sold 80% of apartments but hasn’t received all the payments yet.
He needs ₹5 crore to finish construction.
He takes a bridge loan for 6 months at 14% interest, secured against unsold units.
He repays once the customer installments are received.
🧮 Documents Typically Required
Identity and address proof
Property documents or business financials
Proof of expected income/sale (e.g., buyer agreement, contract)
Bank statements
Loan repayment plan
📝 Related Loans
Home loan (with top-up)
Construction loan
Project finance loan
Working capital loan