A hard money loan is a type of asset-based loan. A borrower receives funds secured by a piece of real property.
Private investors or hard money companies issue hard money loans.

Frequently Asked Questions About Hard Money Loans

1. What Is a Hard Money Loan?

A hard money loan is a short-term, asset-based loan secured by a piece of real estate. Unlike traditional bank loans, hard money lenders focus on the property’s value rather than the borrower’s credit score. Real estate investors commonly use these loans for fix-and-flips, renovations, or bridge financing.

Key Features:
✔ Short-term (6–24 months)
✔ Higher interest rates (8–15%)
✔ Faster approval than traditional loans

2. What Are the Pros and Cons of Hard Money Loans?

3. Who Uses Hard Money Loans?

Hard money loans are popular among:
🔹 Real estate investors (fix-and-flip, rental properties)
🔹 Developers (land loans, construction financing)
🔹 Borrowers with bad credit but strong collateral

4. How to Qualify for a Hard Money Loan?

Lenders look for:
✔ Strong collateral (property value matters most)
✔ Exit strategy (plan to repay via sale or refinance)
✔ Down payment (varies by lender, typically 25–30%)

Tip: Some lenders require experience in real estate investing.

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