Are you between a rock and a hard place financially? Are you in dire need of a loan? Don’t know which kind of loan you should settle for? Well, you are in the right place. We will help you demystify between hard money loans and private money loans and find which best suits you. In the end, you will be able to settle on the loan provider that suits you best. A hard money loan is a traditional short-term mortgage that is collateralized by a hard asset while a private money loan is a money lent by a private organization or individual.

Accessibility

Private money loans are quite strict in the sense that you need to have a good credit score. If you do not meet the set standards, getting your loan approved will be difficult. On the other hand, hard money loans have a simple application process and are easily accessible, as they do not rely on your credit score as long as you have collateral in terms of property. Around 68 million Americans have poor credit. You may also be able to get your hands on private money loans despite you being deprived of the same by banks and hard money lenders.

Flexibility

Private money loans provide you with flexibility since they are not provided by big organizations such as banks, which are strict. They also give you the freedom of spending the money whichever way you see fit. They may also provide additional funding to borrowers that have enough collateral. However, hard money loans provide you with the leeway to spend the money as you please. Banks place many restrictions on how you can spend the money.

Efficiency

Hard money loans do not demand perfect credit scores from you. The collateral you present is what matters most. The application process is seamless and you can have the money processed within a short period. The process of applying for private money loans is basically non-existent. This saves you a lot of time and resources. It gives you time to make plans on how to secure your property.

Philosophy

The focus of private money loan lenders is the value of the assets and collateral quality. Hard money loan lenders do not care much about borrower quality; the focus is on securing asset value.

With the above information, the choices entirely depend on you. You get to select the one that meets your urgency and convenience.