A hard money loan is money borrowed against a physical asset. The asset is held as collateral and traded in exchange for the loan if the liable party fails to pay it back in time. These kinds of loans are usually taken for a short term of up to three years. It involves real estate investment and fulfills the need for hard cash for the borrower. Borrowers whose assets are ineligible for a bank loan often resort to taking a hard money loan. These loans are quite accessible for most borrowers, and here are a few pros of such loans.
Pros of Hard Money Loans
1. Quick Turnaround
The turnaround of a hard money loan is quicker as the lender’s primary concern is the borrower’s collateral asset. Unlike a bank loan, the employment status, income, and tax details are not the lender’s main concern with a hard money loan. This is why a lot of unnecessary delays in lending and recovery can be avoided.
The quality that attracts most borrowers towards a hard money loan is the flexibility that most bank loans cannot offer. In a bank loan, the terms and conditions for borrowing are enough to confuse any ordinary applicant. When dealing with a private entity, the rules are not restrictive and can vary from one deal to another—making it ideal for both parties to set the payback terms according to their convenience.
3. Easy Approval
The need for pre-approval does not apply in the case of a hard money loan. When posting a property as collateral, the loan amount exactly reflects the value of the property. Similarly, when taking a hard money loan to purchase a property, a lender would be willing to approve a loan matching with the property’s worth. When borrowing from a bank, the borrower needs a pre-approval in advance of property purchase. This tends to extend and complicate the process of lending for a borrower. The approval amount of a bank loan also gets reduced for the same reason. This is why more borrowers are opting for a hard money loan and financing their assets with more convenience.
For a hard money loan in Fort Worth, Dallas, San Antonio, or Houston, consult with Error! Hyperlink reference not valid.Global Capital Partners and secure finances on convenient terms.