A financial tool that estimates the total expenses associated with short-term financing intended to bridge a gap between two transactions, such as purchasing a new property before selling an existing one. This tool typically factors in elements like interest rates, arrangement fees, valuation costs, legal expenses, and exit fees. An example would be inputting a loan amount, interest rate, and loan term into the specified fields, resulting in an estimated total cost for the duration of the loan.
The capacity to foresee the overall financial commitment offers significant advantages. It allows borrowers to accurately assess the viability of the bridging loan against their financial position and potential returns from the transactions it facilitates. Historically, calculating these costs manually was a time-consuming process and prone to error; the emergence of automated tools streamlines this evaluation, democratizing access to informed decision-making.
