If you are in urgent need of money to complete a project that a traditional lender will not lend on, then why not take advantage of a hard money personal loan. This type of loan may also be suitable for those in default on mortgage payments or facing bankruptcy or foreclosure. However, due to high interest rates and fees this type of loan is best seen as a temporary solution to your financial crisis.
To be eligible for a hard money loan you need to provide collateral by way of a residential or business property. The money is lent based on a percentage, usually upto 70%, of the value of real estate. This is what the term hard money refers to. Your credit rating will not be the major criteria for this type of loan and some lenders do not perform credit checks at all for this type of loan. The greater the collateral that you have the more money you can borrow, although the loan to value percentage is much lower than a conventional loan. Hard money loans can be applied for online or over the telephone to save time and generally have instant, or very fast, approval times.
Commonly, hard money loan lenders are private investors rather than traditional lenders, thereby reducing paperwork and approval time as well as providing opportunity to secure a loan for a non-conventional project. Hard money personal loans attract a much higher interest rate, because they are considered high risk, but repayment terms are tailored to suit the borrower’s ability to pay. In fact, whilst the loan is often short term with payment required to be completed after 2 to 5 years and a closing fee charged, terms and conditions of these loans are not fixed, but rather negotiated by the parties.
