Bridge Loan Coming Due and No Exit Yet? Your Options at Maturity

At maturity, the entire bridge loan balance is due in one payment. If your sale or refinance hasn't closed by then, the loan is in default unless you and the lender agree on something else. The good news: if you act early, you usually have several options.

What maturity really means

Bridge loans are interest-only, so the balance doesn't shrink over the term. On the maturity date, you owe the full principal plus any unpaid interest and fees. This is the balloon payment, and your exit, whether a sale or new loan, is what's supposed to cover it.

Missing it is a default even if you never missed a monthly payment. That can trigger default interest, late charges and, eventually, the lender's legal remedies.

Your options if the exit is running late

Ask for an extension. Many bridge loans allow extensions, typically for a fee and only if certain conditions are met. Not automatic. See our separate article on how extensions work.

Refinance into a new loan. If the property is now leased and stable, a long-term rental loan like a debt service coverage ratio (DSCR) loan may pay off the bridge. If it isn't ready yet, replacing it with another short-term loan on a new term is sometimes possible.

Sell, even below your target. Accepting a lower price can cost less than months of extra interest and fees.

Bring in capital. A partner, a paydown from another property's equity or your own reserves can reduce the balance and make an extension or refinance easier to approve.

Negotiate a workout. If nothing else fits, lenders may discuss a short forbearance or another arrangement. These depend on your track record and the property's value.

Timing changes everything

Example: Your loan matures December 31. You're under contract to sell, but the buyer's closing has slipped to late January.

• If you call the lender in early November with the contract, a closing date and proof the buyer's loan is moving, a short extension is a straightforward conversation.
• If you call on December 30, the lender has little time to review, and you may be in default before anything is approved.

Same deal, very different outcome.

Plan for it before you close

• Plan an exit that lands well before maturity, not on it.
• Read the extension and default sections of your loan documents.
• Start your refinance application or listing well ahead of maturity.
• Keep reserves for a few extra months of carrying costs.

RSC Private Lending's bridge loans carry a 12-month term with interest-only payments and no prepayment penalty, so you can pay off as soon as your sale or refinance closes.

What this means for you

Maturity is a date you can see coming from day one. Track it, start your exit early and talk to your lender the moment you think you'll miss it. Early, documented updates keep your options open.

Worried about a maturity date on an existing loan? Send RSC Private Lending your refinance scenario for a term sheet in 24 hours. Subject to underwriting.