Many people are familiar with a soft money loan, like a car loan, but are unaware of other lending options. For example, a hard money loan is a method of borrowing money without going through a mortgage broker. This type of loan can be a convenient method of borrowing money for a home, and has many benefits. Here are a few things to consider before reaching out to your hard money lender.

The Benefits of a Hard Money Loan

It’s Quicker:
Working with a hard money lender is quicker than going through a bank for a loan, and you can typically expect to receive your loan in about seven days. The application process is shorter, and only requires the asset you will use as collateral.

It’s More Personal:
Working with private money lenders is more personal than working with a bank because you are speaking directly to the person who will be financing your loan. This also means that you may be able to negotiate a more flexible repayment plan. Hard money lenders look at each loan individually, which means you have an opportunity to build a rapport with your lender.

Negative Credit History Will Not Disqualify You:
Most private money lenders won’t require you to submit a credit history report or ask for proof of income. You should be prepared to talk about your finances, but the value of your collateral is likely to be more important.

Things to Keep In Mind

One of the reasons a private money lender is willing to take on the risk that comes with lending money to someone without checking their credit score is because your collateral needs to be worth more than the loan. Lenders pad this risk with high-interest rates but this is rarely an issue for folks who can pay this sum back quickly. As such, private money loans are typically only for short-term financing needs, lasting for no longer than two years.

Are you ready to invest in hard money loans? Rely on ARC Private Lending when you’re ready to get your new project off the ground.