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So, your credit score has seen better days. Or maybe you haven’t yet established one.
If you can’t get a traditional loan, you can still look for Hard Money Personal Loans. Even if you can get a traditional loan, it may make sense if you need money quickly.
What Are Hard Money Personal Loans?
Hard Money Personal Loans come from individual lenders. In some cases, such as with real estate or commercial loans, the loan is based on the value of the property securing it or the expected value after improvements rather than on your income or credit history.
So although the phrase “personal loan” usually means an unsecured loan or signature loan. this isn’t necessarily the case for hard money personal loans. In some cases, they will involve collateral, such as a title loan used for Auto repair financing.
In other cases, the lender is making their money by specializing in low credit score loans, such as a personal loan with 520 credit score. They will lend to people that traditional lenders turn away and they charge extra interest to make it make sense on their end.
How Does A Hard Money Loan Work?
Hard money lenders offer low-interest rates and flexible repayment plans. Their services are very fast and convenient to use. It’s a cross between a bank and a private lender. They do not require a credit check but take caution because these secured loans have high-interest rates and short repayment periods, typically from four months to one year.
The hard money personal loan is for people with very bad credit ratings as well as those with great credit scores. In fact, you can get low-interest car title loans regardless of your credit history. You will be able to receive quick approval from them without having to provide much collateral or personal information. You can choose from a broad selection of loan programs, from traditional fixed-rate loans to short-term balloon mortgages.
Hard Money Loan Rates: How They’re Set
In terms of interest rates, hard money lenders charge a very low rate. They don’t have to worry about the competition driving down their rates as much as they do with traditional bank loans. They are still very competitive compared to other types of loans you could obtain from personal lenders or credit unions. You can use them to consolidate your debts or make a major purchase you otherwise couldn’t afford.
The Risks Of Hard Money Loans
Hard money lenders offer a few different types of loans. You can get a car title loan from them or a straight-up hard money personal loan. Each type of loan has an interest rate that is specifically designed to be the most appropriate for the borrowers requesting it.
It doesn’t matter how great your credit score is if you have an extended payment cycle which also happens to be late or missing payments. Although you can take advantage of their terms, don’t think that they aren’t going to pull a regular credit check on you to make sure you are not spending more than your income. If you are, they will make you pay the difference.
If you are successful in qualifying for a hard money loan, there is also no guaranty against defaulting on your loan. If your credit bounces back after the loan term is over, they will charge all of the interest that was paid during that period to your account. You must do everything in your power to keep up with payments to keep this from happening.
Pros And Cons Of Hard Money Loans
The pros of hard money personal loans include the ability to borrow more than you otherwise would with traditional lenders. You can borrow up to 50% of your collateral value or up to 70% of the appraised value. The interest rate for this loan is higher than any other type of loan; however, you can get very small loans that are not easy to obtain from other funding sources.
Hard money personal loans are available in amounts between $5,000 and $100,000. The loan term is usually three months, but it could be anywhere from six months to one year, depending on which terms you negotiate. Most providers will provide fast approval if you apply right online or over the phone rather than mailing in an application form. This makes it a convenient way to get the money you need quickly.
Now for the cons of a hard money personal loan. You will have to check your credit report before you apply for a hard money personal loan. If the lender sees that you have recently been late on payments, they will require some form of collateral from you. They will want to know what assets are available if you default on your loan. If they don’t feel that your assets are sufficient, they won’t approve this type of secured loan for you.
Other terms to look for on hard money personal loans that you would not find with other banks are the amount of available credit they offer. You can often get credit with a hard money loan provider that will exceed your limits at another bank. Some are even willing to extend you credit limits you couldn’t otherwise obtain.
Some hard money lenders have very tight requirements for borrowers. You cannot have bad credit or bankruptcy in your past history with them so you won’t be able to take advantage of their best rates. If there is anything further they can do to help you, ask what they require before applying for the loan.
How Do I Find Hard Money Personal Loans?
It’s usually best to look for them through a clearinghouse, like TheGuaranteedLoans. We keep files on a variety of lenders and help consumers connect to them.
You fill out one form with us and we check our database to see if there is a good match for your needs. For example, if you are looking for a 400 credit score personal loan, we check to see what’s available.
When we find a match, we let the lender know about your application. Then they make the next move and contact you so the two of you can make the deal.
What Paperwork Is Involved?
Because they specialize in non-traditional loans, they keep the paperwork to a minimum. You do need to show that you are a legal adult and that you are a citizen of the US or a legal resident. In most cases, this is proven by sending a photo or fax image of your photo ID, such as:
- Driver’s license.
- State-issued ID card.
- Military ID card.
- Tribal ID card.
You also likely need some indication of your income, such a copy of a recent pay stub or a copy of a recent bank statement. If you are applying online, these need to be in a digital format, such as a PDF copy of your bank statement.
Apply Now For A Hard Money Personal Loan.
Take a few minutes to gather up your documents and maybe think about how you will upload them. Then, when you are ready, let TheGuaranteedLoans walk you through the initial stage of the online loan process.
If you are ready to get started, just click the button below. The sooner you start, the quicker you can get the funds you need.
FAQ
The short answer to this question is a definite yes! A hard money lender can take a very basic look at your situation and decide to help you. However, this will not be as great as it would be to do even better with them. They will conduct an extensive background check on your credit history as well as debt. You may not qualify for this type of loan if you have any black marks on your credit report.
The time it takes to get a hard money loan depends on a number of things. It all depends on your credit score and the lender’s criteria. They will take a look at all of your financial history and debt before they decide if you are fit for their particular type of loan. A hard money lender may also have different requirements from bank lenders, so it may take longer for you to find out if you qualify.
You will have to pay 10%-20% interest on the loan amount, but this is not as high as with private lenders. This number usually coincides with the length of time that you will need to repay the loan plus accrued interest before it is due.
Your hard money loan will not affect your credit score. However, if you are liable for any other credit you have at the time, this will have an effect on your score. This will depend on how your lender decides to handle your debt to income ratio.
If you have bad credit or are otherwise unable to get a traditional loan, you may be required to put up some form of collateral. The value of this collateral will determine whether or not the hard money lender is willing to give you a loan based on its value when it is repossessed.