# Interest Rates for Bridging Loans: Why Retained Interest Cuts Your Net Advance

Insights article · Singapore · Published 2026-11-01

> You were quoted a monthly rate. On a rolled-up Singapore bridge, that interest is retained at drawdown, so the cash that lands is less than the gross facility. Tenor often moves the net more than the rate.

Most borrowers searching for interest rates on bridging loans are here because a bank has already said no. The figure that comes back looks simple: a monthly rate, a loan size, an LTV. Term sheets here are issued within 24 hours of a complete enquiry, and drawdown usually takes about two weeks.

It is not the figure that lands in your account. If you cannot service interest from income, and most TDSR-blocked borrowers cannot, the interest is retained at drawdown. The gross facility and the net advance are two different numbers.

A cheaper headline over a long tenor can leave you with less cash than a higher rate over three months. That is the arithmetic brokers actually run.

> **Why this matters:** Size the deal off net proceeds, not the headline LTV, or retained interest can leave you short of the cash you need to complete.

## Highlights

- Quoted interest rates for bridging loans are not the cash you receive; retained interest is deducted at drawdown.
- On a 70% LTV Singapore facility, retained interest can cut net proceeds well below the headline LTV.
- A shorter tenor at a higher monthly rate can leave more cash than a cheaper 12-month line.
- We lend against the asset and the exit, not income, so TDSR does not set the advance.
- Indicative terms: $1M – $100M, up to 70% LTV, 3–24 months, term sheet typically within 24 hours. Accredited investors and corporates only.
- [Talk to a specialist](https://www.rikvincapital.com/sg/contact-us)

## Gross facility versus the cash that lands

Where a borrower cannot service interest monthly, a private bridge in Singapore is often structured with retained interest. You do not pay a monthly debit. The lender deducts the contracted interest from the facility on day one.

Take a $10 million gross line at up to 70% LTV on a property worth about $14.3 million. That 70% is the gross cap, not the wire.

Using a hypothetical rate of 1.00% a month retained across 12 months, $1.2 million is deducted at drawdown. You receive $8.8 million. Cash against the asset sits closer to 61.5% LTV, not 70%.

Arrangement fees, if deducted, would cut it further. Live terms are indicative and subject to valuation and due diligence.

The rates used in this piece are hypothetical inputs chosen to show the arithmetic. They are not Rikvin's rates. For the mechanics in full, see [how interest retention reduces your bridging loan proceeds](https://www.rikvincapital.com/insights/how-interest-retention-reduces-your-bridging-loan-proceeds).

For a [TDSR bridging loan](https://www.rikvincapital.com/sg/bridging-loans/tdsr-loan), this structure is the point. We lend against the asset and the exit because [the TDSR framework](https://www.mas.gov.sg/regulation/explainers/tdsr-for-property-loans) would otherwise gate the file on income you do not have.

## Tenor can cost you more than the headline rate

Borrowers fixate on the monthly rate. Tenor is often the larger lever on net cash.

Keep the $10 million gross. Using a hypothetical rate of 1.25% a month for three months, retained interest is $375,000 and the net advance is $9.625 million.

Using a hypothetical 0.85% a month for twelve months, retained interest is $1.02 million. You receive $8.98 million. The cheaper-looking line puts roughly $645,000 less in your account.

| Tenor | Hypothetical monthly rate | Interest retained on $10m | Net advance |
| --- | --- | --- | --- |
| 3 months | 1.25% | $375,000 | $9.625m |
| 12 months | 0.85% | $1.02m | $8.98m |

That is why we ask when the exit actually completes, not how low the rate can go. A sale with a signed Option to Purchase in four months does not need a twelve-month line.

If you want the file run on your numbers, [see how the lending process works](https://www.rikvincapital.com/sg/process) from enquiry to drawdown. Term sheets are usually issued within 24 hours, and drawdown typically takes about two weeks.

## What prices interest rates for bridging loans

The rate is not a menu. It tracks LTV, asset quality, title, and how hard the exit is.

A first-charge Good Class Bungalow with a contracted sale is a different file from a tightly geared shophouse with a hoped-for refinance. Cleaner security and a dated exit price keener. A thin exit or a higher LTV prices wider.

Compare that with a bank. A bank is underwriting income; we are underwriting the asset. That is why [a private bridge versus a bank facility](https://www.rikvincapital.com/sg/insights/bank-vs-private-bridging-loan-singapore) can complete when TDSR will not.

It is also why the cost is higher, and why that cost should cover a short, known window. Related: [the Holland Road prime residential bridge](https://www.rikvincapital.com/sg/case-study/prime-residential-bridging-loan-for-holland-road-property) was sized around a dated exit, not a long tenor.

![Singapore shophouse facade on a conserved street as commercial loan security](https://media.rikvincapital.com/rikvin-media/unsplash-1789437893696-2390-1200x630.jpg)
*Match tenor to a dated exit: extra months of retained interest are cash you never receive.*

## When a retained-interest bridge is the wrong tool

A bridge is the right tool when you have a credible exit inside 3–24 months and a completion date that needs funding within weeks. It is the wrong tool if the exit is a hope. It is also the wrong tool if you can wait for a term loan, or if you need every dollar of the 70% LTV as cash on a long tenor.

The main risk is mismatch. Interest is retained up front on the contracted tenor. If the sale slips, you may need an extension, and you have already taken a smaller net advance than the gross line implied.

You still repay the gross. Do not use a twelve-month line with retained interest to keep options open if a three-month window is real.

You would be retaining interest for months you may not need, and starving the completion statement. Unused retained interest is refunded if you repay early, though a minimum interest period can apply, but that cash is still missing on completion day.

If the income test is the only blocker, [a bridge without TDSR](https://www.rikvincapital.com/sg/insights/bridge-loan-without-tdsr-singapore) is the cleaner frame. For product choice across asset types, start with [Singapore bridging loans](https://www.rikvincapital.com/sg/bridging-loans) and size every offer on net proceeds.

We lend only to accredited investors and corporates. Rikvin Capital is a direct private lender and an excluded moneylender under the Moneylenders Act, not a bank.

## Frequently asked questions

### Why is the cash I receive less than the loan I signed?

Because interest is usually retained at drawdown when you cannot service it monthly. On a $10 million, 12-month illustration at a hypothetical 1% a month, $1.2 million stays with the lender and $8.8 million is wired. Terms are indicative and subject to valuation. Fees, if deducted, reduce the net further.

### Can I pay the interest monthly instead of having it retained?

Only if you have the cash flow to do it, which most TDSR-blocked borrowers do not. Monthly servicing can raise the net advance because less (or no) interest is retained. If income is the reason the bank declined, assume retained interest. We do not treat this as advice; the structure follows the file.

### Does a lower monthly rate always mean I pay less?

No. A lower rate on a longer tenor can retain more interest than a higher rate on a short one. Compare net advance and total interest in dollars against your real exit date, not the monthly percentage alone. Illustrative terms only; any facility is subject to valuation and due diligence.

### Does TDSR apply to this kind of private bridge?

No. Rikvin Capital is not a bank and is not bound by TDSR. We underwrite the asset and the exit, lending only to accredited investors and corporates. That does not make the loan cheap or automatic. A weak exit or an inflated value still fails credit. Terms remain indicative.

### How quickly can I see a rate on my file?

We aim to issue a term sheet within 24 hours of a complete enquiry. Drawdown typically takes about two weeks, faster if the title pack is clean. The rate on that sheet is indicative until valuation and due diligence are done. Speed does not replace an exit you can evidence.

Match the tenor to the exit you actually have, and retained interest becomes a cost you chose rather than a shortfall on completion.

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Markdown version of https://www.rikvincapital.com/sg/insights/interest-rates-for-bridging-loans-net-advance — provided by Rikvin Capital for AI agents. Site index: https://www.rikvincapital.com/llms.txt