A financial tool exists that determines the cost associated with short-term financing instruments used to “bridge” the gap between purchasing a new property and selling an existing one, or to quickly secure funds for an investment. It assesses the various fees and interest charges applicable to this type of temporary loan, providing an estimate of the total repayment amount. For example, by inputting the desired loan amount, interest rate, term length, and any associated fees, this mechanism can calculate the total cost of borrowing.
Understanding the expenses related to short-term lending is crucial for making informed financial decisions. This understanding allows borrowers to accurately compare offers from different lenders and budget effectively for repayment. Historically, calculating these costs manually was a time-consuming and potentially error-prone process. The advent of automated tools streamlined this process, allowing borrowers to quickly and easily assess the financial implications of obtaining short-term capital.
