Bridging Loan Approval: How Long Will It Take?

Bridging loans can be a valuable tool for individuals or businesses that need quick access to funds for a temporary period of time. Whether it’s to bridge the gap between the sale of one property and the purchase of another to finance a renovation project or cover unexpected expenses, bridging loans offer a flexible and often faster alternative to traditional loans.

However, before applying for a bridging loan, it’s important to understand the approval process and what factors can impact the timeline. If you’re considering a bridging loan, read on to learn more about what to expect when applying for a bridging loan, including how long it typically takes for lenders to approve your application.

What is a bridging loan?

If you need short-term funding for a variety of purposes, a bridging loan could be an ideal option.

In Australia, bridging loans are commonly used by homeowners who are looking to upgrade their home or downsize to a smaller property. A bridging loan, also known as a bridging finance or bridging mortgage, is a type of short-term loan used to ‘bridge’ the gap between the sale of a current property and the purchase of a new one.

The idea behind a bridging loan is that it provides the borrower with the funds they need to purchase a new property before they have sold their current one. This can be particularly useful in situations where the borrower has found their dream home and wants to secure it before someone else does.

Once the borrower has sold their current property, they can use the proceeds to repay the bridging loan. Bridging loans can also be used to fund renovations or refurbishments to an existing property.

Bridging loans are generally offered by banks, credit unions, fintechs, private lenders and specialist lenders. They typically have higher interest rates and fees than traditional home loans, reflecting the short-term nature of the loan and the higher risk involved for the lender. The amount of funding available through a bridging loan can vary depending on the lender and the specific circumstances of the borrower.

How do you apply for a bridging loan?

The application process for bridging loans in Australia can vary depending on the lender and your individual circumstances. Once you have identified a potential lender that offers bridging loans, these are the general steps to follow when applying for a bridging loan:

1. Prepare the necessary documentation that the lender will require.
2. Fill out an application form and submit it to the lender.
3. Provide property valuation, if needed.
4. Wait for approval as the lender reviews your application.
5. Once your application is approved, sign the loan documents.
6. The lender will transfer the funds to your account.

At Mango Mortgages, we specialise in providing bridging loans in Australia and can guide you through every step of the process. Our application is simple and involves only a few key steps. You can submit an enquiry by phone, email or apply online.

First, you’ll need to provide us with some basic information about your financial situation and the purpose of the loan. You can do this by filling out our online application form.

Next, we will send you an initial quote via email, which will outline the interest rates, costs, loan structure and document requirements, such as proof of income, bank statements or details about the property you’re looking to purchase or renovate.

If you are satisfied with the proposal, we will then provide you with a formal and comprehensive letter of offer. Once you sign the proposal and provide us with the required documents, we will request our solicitors to prepare the security documents or arrange a valuation if necessary. We will settle the loan by transferring the funds electronically.

How long does it take to get a bridging loan?

The process of approving a bridging loan can differ based on the lender and specific details of the loan application. At Mango Mortgages, we have streamlined our processes to minimise delays, and we aim to provide a fast and efficient service. We provide a loan decision within 24–48 hours of receiving a completed application, and our funding becomes available typically within 3–5 days from application.

However, there are several factors that can impact the approval timeline, including:

• Complexity of the loan. If the loan involves multiple properties, unusual terms or conditions or other unique factors, it may take longer to assess the application and provide a loan decision.
• Borrower’s creditworthiness. While bridging loans are typically secured against the property being purchased or renovated, lenders will still assess the borrower’s overall financial situation and credit history when considering a loan application. With a poor credit history or other financial issues, an application may take longer to assess.

Factors that can speed up approval time

If you’re in need of a bridging loan, you likely want to receive funding as quickly as possible. While the approval timeline can vary depending on several factors, there are some steps borrowers can take to speed up the process. Here are some tips if you want to accelerate the approval process for your bridging loan:

1. Have all necessary documentation ready ahead of time. This might include proof of income, bank statements, details about the property being purchased or renovated and any other relevant financial information.
2. Respond promptly to lender requests. Failure to respond in a timely manner could result in a longer approval timeline or even a denied application.
3. Be transparent about any potential issues that could impact the loan application. Be upfront and transparent with the lender. This can help avoid surprises later in the process and may even help the lender work with you to find a solution that meets their needs.
4. Work with a lender that prioritises efficiency and transparency. This helps ensure a smooth and timely application process.

Key takeaway

Bridging loan approval times can differ greatly from lender to lender. Some lenders may offer fast approval processes that can take as little as a few days, while others may take several weeks to approve a loan.

To speed up the approval process, ensure you have all the necessary documentation ready, provide accurate information and work with a reputable and experienced lender. It is also essential to understand the terms and conditions of the loan agreement and seek professional financial advice before applying for a bridging loan.

Mango Credit

Yanis Derums is the Founder and Director of Mango Credit– a leading private lender specialising in bridging loans for personal use and business short term loans for commercial and/ or investment purposes. Yanis has extensive experience with financial analysis, credit assessment, product structuring, and general business management