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Reasons behind Commercial Hard Money Loan Rates
If you are experiencing numerous financial difficulties, obtaining a commercial hard money loan can be an excellent idea. On the other hand, if you plan to borrow this type of mortgage, you will need to proceed and be prepared to pay a higher interest rate.last updated Sunday, July 13, 2025
#Commercial Hard Money #Loan Rates
| by John Burson |

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Here are several reasons why commercial hard money loans have high-interest rates
Credit score
Many commercial real estate owners have a credit score below 650. This means that they are considered poor and therefore cannot obtain or qualify for traditional lending. Commercial hard money loans are usually their last resort. Commercial hard money lenders must charge extra to cover the risk of lending money to such individuals.
Troubled borrowers
Many commercial hard money loan borrowers typically find themselves in a distressed situation. For instance, if they are close to losing their home due to foreclosure. In such a case, the borrower has no option but to agree and accept the commercial hard money loans with a high interest rate.
No competition
Commercial hard money lenders are willing to offer their private funds. Therefore, it is not easy to locate and find them. Consequently, they can charge the interest rates they wish and still attract borrowers.
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