THINGS TO LOOK OUT FOR
The fees and interest charged by financing companies are only subject to the National Credit Act if they’re registered as credit providers with the National Credit Regulator (NCR).
When bridging financiers award an advance, referred to as a discounting agreement, it’s not classified as a credit agreement. It doesn’t mean you get a discount, but rather that their fees and interest could be higher than prescribed by law. Exactly how much depends on the particular financier.
Ask for all fees, interest and levies to be explained before you sign for the loan, and make sure you know what the total cost to you will be. By choosing a financier registered with the NCR, you’re assured of protection by the law.
WHEN IS IT USEFUL? Bridging finance could be a great help, provided you can pay the loan back quickly. It’s usually used as a deposit on a new property, for transfer duties, removal expenses or outstanding municipal tariffs and rates.