Getting approved for a loan isn’t easy for someone with poor credit. Luckily, hard money loan lenders are available to help. Hard money loans come in handy for a variety of reasons. They’re easier to qualify for than traditional loans, often require less paperwork, and you can receive funding quickly. Read on to see what you can expect from applying for these loans.

Loan Ratios

Hard money loan-to-value ratios tend to hover at around 60-70% of the current appraised value of the property. This ratio means that you’ll need to come up with the rest of the money for closing costs and any additional fees associated with obtaining a hard money loan. It can be a challenge, as some borrowers may not have access to additional funds. So consider the price of the purchase and how much you can handle before applying.

Interest Rates

Interest rates on hard money loans are typically higher than traditional ones, ranging from 8-18%. These rates can vary depending on the lender and will also be affected by your credit score, asset type, and other factors. While you can shop around and compare different lenders to find the best deal, ARC Private Lending has some of the best rates.

Loan Terms

Hard money loan terms are typically shorter than those of traditional loans. They usually range from 6 months to 5 years, but some lenders may offer longer terms. The length of your loan term should depend on your financial goals and needs.

Repayment Terms

Repayment terms for hard money loans are typically structured differently than those of traditional loans. Most lenders require that you make monthly payments, but some may allow you to pay off the entire loan in one lump sum. It’s vital to understand the repayment terms before signing any agreements.

Hard money loans can be a great option for those who need access to funds quickly and are unable to obtain traditional financing. The interest rates and loan terms are typically higher than those of traditional loans, but the repayment terms can be more flexible. A professional lender such as ARC Private Lending can provide the short-term money solution you need. Contact our local team today for more information.