Bridging Loan

A bridging loan is a short-term financial solution offered by 1AP Capital to assist homeowners transitioning from their current home to a new one. This type of loan is ideal for covering the financial gap that occurs between the sale of your existing property and the purchase of your next home.

If you’re planning to move from a Housing Development Board (HDB) flat to a private condominium or other private property, a bridging loan can provide the necessary funds quickly.

The main purpose of this loan is to help you manage the initial costs associated with buying a new property, primarily the 20% down payment that is often required.

The process works like this: once you sell your current property, the proceeds from the sale will eventually pay off the bridging loan. Until then, the loan serves as a temporary financial “bridge,” giving you the liquidity needed to purchase your new home without waiting for your old house to sell.

Example you’re selling your current property and buying a new one, but there’s a gap in receiving the sales proceeds. How can a bridging loan assist you during this period?

Consider the situation of a couple, Mr. and Mrs. Lee. They plan to upgrade from their HDB flat in Punggol, priced at S$450,000, to a new condominium in Kallang costing S$1,000,000. They have a buyer for their flat, but the proceeds from the sale, essential for financing their new purchase, will only be available in 5 months.

Here’s a breakdown of the costs involved in their new property purchase:

The Lee’s have S$50,000 for the initial 5% cash down payment but are short of the S$200,000 needed for the 20% down payment, as their funds are tied up in the sale of their HDB.

A bridging loan is ideal in this scenario. It covers the shortfall in the downpayment until the sales proceeds from their HDB are received. This type of loan ensures they can purchase the condominium without delay, bridging the financial gap seamlessly.

At 1AP Capital, we provide tailored bridging loans to ease your property transition, ensuring you can secure your new home without financial stress.

Before Listing Your Renovated Home for Sale
Consider applying for a bridging loan if you plan to renovate your old home to increase its market value. This can provide the necessary funds for renovations without depleting your savings, helping you secure a better sale price.

For An En Bloc Sale
If you sold your home through an en bloc sale, you might need to find a new home quickly. Bridging loans are perfect in these situations, providing fast access to funds to purchase a new property without delay, especially in a rising market.

When Upgrading To A Bigger Property
The initial costs can be substantial when moving from an HDB to a private property. A bridging loan from 1AP Capital can help cover the deposit and other upfront expenses, making the transition smoother without straining your finances.

3-Room HDB Flats

• Average price: S$275,000 – S$375,000
• Size: 60-65 square metres
• Description: These homes typically feature one master bedroom, one common bedroom, a living room, one or two bathrooms, a kitchen, and a storage room. The cost varies significantly depending on the property’s location.

4-Room HDB Flats

• Average price: S$400,000 – S$550,000
• Size: 90-100 square metres
• Description: A 4-room HDB flat includes one master bedroom, two common bedrooms, a living room, a kitchen, a storeroom, and two bathrooms. The price reflects the size and amenities compared to 3-room flats.

5-Room HDB Flats

• Average price: S$500,000 – S$670,000
• Size: 110-120 square metres
• Description: These larger flats come with one master bedroom, two common bedrooms, two bathrooms, a kitchen, a storeroom, and a spacious living room, often including a dining area. They offer more space and comfort.

Executive Apartments

• Average price: S$550,000 – S$690,000
• Size: At least 130 square metres
• Description: Ideal for larger or multi-generational families, these units feature a master bedroom, two common bedrooms, a large living room, a dining area, an additional area for use as a study or guest room, three bathrooms, a kitchen, and a storeroom. Some may include stairs.

Executive Condominiums (ECs)

• Average price: S$800,000 – S$950,000
• Description: ECs are unique hybrid housing types that begin as public housing and transition to private ownership after five years. They offer amenities similar to private condominiums and are subject to a 99-year lease.

Condominiums

• Average Price: S$1,000,000 – S$2,000,000
• Description: These are private residences that often come with luxury amenities such as 24/7 security, gyms, swimming pools, BBQ pits, and function rooms. The design and facilities contribute to a higher standard of living and, thus, a higher price range.

Opting for a bridging loan involves certain risks, and it’s essential to understand these before proceeding with this type of short-term borrowing:

Debt Risk
Bridging loans can quickly lead to debt if not managed carefully. For example, if the sale of your old home does not go as planned, selling for less than expected or taking longer to close, you might struggle to repay the loan plus high interest.

Asset Risk
Bridging loans are typically secured against an asset, usually your property. If you fail to repay the loan, you risk losing this asset. This adds a layer of risk, as your property can be taken to settle the debt.

Credit Risk
Failing to repay a bridging loan can seriously affect your financial reputation. If you default, the lender might initiate bankruptcy proceedings against you, which can damage your credit score and hinder your ability to secure loans in the future.

At 1AP Capital, we believe in financial inclusivity and strive to accommodate a diverse range of borrowers. Here’s what you need to know about eligibility:

Open to all
We welcome applications from Singaporeans, Singapore PRs and foreigners with a valid work permit, as long as you are employed, self-employed, or have other forms of income.

Age requirement
The primary criterion is age. You need to be at least 21 years old to be eligible for a loan with us.

Our goal is to tailor the best possible loan plan for each individual, ensuring that it aligns with your financial situation and needs.

For Singaporeans / Singapore PRs:

• Proof of identity (NRIC, passport)
• Proof of income (CPF / bank statements)

For Foreigners:

• Work Permit / S Pass / E Pass
• Proof of residence (Utility bills, phone bills, tenancy agreement, etc.)
• Payslips / bank statements

1AP Capital’s loan application process is designed for speed and efficiency. Here’s how it works:

1. Submit application form: Completing our application form is quick and straightforward, taking just about 5 minutes. You also have the option to apply using Singpass for added convenience.
2. Get application result: After submitting your application, you can expect to receive an in-principal approval within just 25 minutes.
3. Collect your money: Once approved, the final step is to sign the loan contract face-to-face. After this, you’ll receive your money immediately, on the spot.

This streamlined process ensures that from application to disbursement, your experience is swift and hassle-free.

The amount you can borrow is influenced by your income, credit history, and existing financial obligations. We aim to provide the amount you need while ensuring your repayments are manageable.

Our loan calculator can help you understand your borrowing capacity and repayment scenarios.

Absolutely, you can! At 1AP Capital, we believe in giving everyone a fair chance, regardless of their credit history. Unlike traditional banks that may reject applications based on credit scores, we welcome all applicants.

Our approach is to assess each application on an individual basis. Our professional loan officers are dedicated to understanding your unique financial situation. If we determine that the loan is manageable within your current financial means, we are more than willing to extend our lending services to you.

At 1AP Capital, we encourage financial prudence and reward it by imposing no penalties for early loan repayments. Should you choose to settle your loan before the agreed-upon date, no additional fees will be charged, and any outstanding interest will be waived, aligning with our commitment to support your financial well-being.

Privacy is paramount at 1AP Capital. All loan agreements and communications are conducted digitally to ensure confidentiality. Physical copies of documents are provided only upon request, ensuring that your personal information remains secure with us.