Most bridge loans can be repaid early — the real question is what early repayment costs, and that’s set by the note, not by custom. Some lenders charge a prepayment penalty or guarantee themselves a minimum number of months of interest whether you need the money that long or not. At BuildUp, prepayment is allowed: if your exit comes early, you can repay early, and the payoff terms are stated in your term sheet before you sign.
Why this matters more on a bridge than on any other loan: bridge interest is a function of time, and the whole product exists to be exited. A sale that closes in month seven instead of month twelve, or a refinance that funds ahead of schedule, is the plan working. Whether those saved months save you their interest — or get clawed back by a clause — is decided the day you sign, not the day you repay.
The four clauses that decide it: a prepayment penalty (a fee, often a percentage of the balance, for repaying ahead of maturity); a minimum-interest or guaranteed-interest clause (the lender collects, say, six months of interest even if you repay in three); a lockout (a period when you may not repay at all); and exit or release fees that only appear in the payoff demand. None of these is illegitimate on its face — lenders price around them — but each one changes what your exit is worth, and they’re exactly the terms that hide in the fine print of an otherwise attractive rate.
How to check any lender, including us: before you sign, ask for the payoff figure in dollars at three, six, and nine months — principal, accrued interest, and every fee that would appear in the payoff demand. A lender who wrote the note can produce that math in minutes. If the answer is vague, or the quoted rate only works when you stay the full term, you’ve learned what the rate really is.
Where BuildUp stands: prepayment is allowed — if your exit comes early, you can repay early, with payoff terms stated in your term sheet before you sign. Our loans are monthly, interest-only, so payments stop accruing when the principal is repaid, and we underwrite the exit from day one — which means an early exit isn’t an inconvenience to us; it’s the deal doing what we underwrote it to do.
The question to ask any lender: “What do I owe you, in dollars, if this goes better than planned?” The answer tells you whether the lender makes money on your plan — or on your timeline slipping.
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Related: Bridge loans · Lending in Nevada