Rolled Up Interest
Interest roll up simply means that there will be no monthly interest payments required. Instead, the lender agrees that the repayment of capital and interest can be deferred for a period, which in the case of Bridging Loans is often until the end of the loan term.
Therefore, the interest is ‘rolled up’ and paid as a lump sum at the end of the loan term. This will result in interest being compounded meaning the repayment at the end of the term being larger than if interest was being paid monthly, or 'serviced' throughout the duration of the loan term.Back