hard money loans

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Ever heard of hard money loans?

Don’t worry, they’re not loans that are doled out solely in coins. That would be a royal pain!

Rather, they are loans that come from private lenders rather than institutions. Plus, they usually require some form of collateral from the borrower. In some cases, hard money loans are just what you need to jumpstart an investment.

Let’s check out 5 benefits of using hard money loans. Then you can decide for yourself!


One of the best things about hard money loans is how fast you can have the money in your account. Once you have supplied the lender with the required documents, you can expect to hear back within a couple of days.

Many loans finance in a week or less. A far cry from the month or so that it takes banks and other institutions to fund.

Flexible Payments

Another key benefit is the ability to negotiate your repayment plan. Banks and other large institutions typically have their own schedules and you can take it or leave it. Private lenders, however, are willing to work with you and set up a schedule that works best for you.

No Prepayment Fees

It’s always nice to have the option of repaying your loan faster than originally agreed upon. That can save you a bundle in interest over the long term.

Unfortunately, banks will often ding you for this by charging prepayment fees. Not so with hard money loans. Most terms allow you to pay back the money as fast as you want without any extra fees.

Fewer Requirements

Banks seem to require your life history and then some when you ask them for a little money. It makes sense, though, as they are lending to someone they don’t know.

There’s little to guarantee that their money will come back to them. Understanding your income, spending habits, and past behavior with loans helps them to ensure you’re an acceptable risk.

However, hard money lenders often don’t ask for as much information. This is because they usually require you to provide something as collateral, often property or something else valuable. This means that if you don’t pay the loan, they have a right to take your collateral and sell it to recoup their investment.

Credit History Is Not As Important

For the same reason, your credit history is not as important to a private lender as to a bank. This often makes hard money loans a great option for borrowers with a poor credit history.

Just remember, you have to pay back that loan or you’ll lose whatever you put up as collateral.

Are Hard Money Loans Right for You?

Only you can decide if hard money loans are right for you. The hard money lending risks are different as opposed to traditional bank loans. But there are quite a few benefits as well, as you can see.

If you’re interested in taking out a hard money loan, feel free to contact us. We can help answer your questions about the process and even help you decide if it’s a good idea for your situation. We look forward to hearing from you!