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What is a Hard Money Loan?

Are you looking for financing options to help you renovate or repair your home? Or do you simply need fast funding to bridge the gap in your finances? Hard money loans, sometimes referred to as bridge loans, can be an option when you need extra cash to handle an unexpected expense, pay for home repairs, or secure a new home before your current one has a committed buyer. Before you apply for a hard money loan or explore alternative options, it is essential to understand what it is and how it works.

A hard money loan is a type of secured loan where an individual can borrow against the value of an asset, such as a home. The most common purpose of a hard money loan is to provide short-term financing for different real estate projects, like home renovations or improvements. Similar to a traditional mortgage loan, a hard money loan is guaranteed by the property that is connected to the loan. Unlike traditional loans, which are funded by banks or credit unions, hard money loans are typically funded by hard money lenders, which tend to be private investors or finance companies. 

The types of lenders involved aren’t the only difference between hard money loans and traditional bank loans. In contrast to traditional loans, eligibility for hard money loans is based on many factors, including the value of your property, rather than just your credit history. With hard money loans, you can usually receive the money within ten business days, which is a longer timeframe than some other loan options.

Although hard money loans may help you fund your projects and take care of different expenses, they are not always the right option for everyone. Exploring all of your secured loan options is the key! With a vehicle-secured loan serviced by LoanMart, you can expect to receive competitive interest rates and zero prepayment penalties. Unlike hard money loans, if you’re eligible for funding, you can obtain your loan proceeds in as little as one business day. Call 855-422-7412 to learn how to qualify for a car title loan.1 3 5

How Do Hard Money Loans Work?

As you have previously read, private investors or finance companies typically provide hard money loans instead of financial institutions like banks or credit unions. Real estate properties typically secure hard money loans, but other assets can be used as collateral for the loan, such as land, vehicles, equipment, or other tangible assets with value. 

Since hard money loans are secured by collateral, your asset must have an appropriate amount of value to qualify for funding. If you want to secure the funds you need for a real estate project or other pressing financial matters, you will also need to show proof of your ability to repay the loan. Typically, proof of income includes recent bank statements or pay stubs.  

While a hard money loan can be a quick way to obtain cash, it may be wise to consider the short amount of time you will have to repay the loan in comparison to some other loan options. Hard money loans typically have loan terms lasting around 12-24 months, which might be a disadvantage if you need more time to repay the money. 

Comparatively, borrowers can have up to 3 years to repay a title loan serviced by LoanMart, and there are no prepayment penalties if you choose to pay off your loan early.  Additionally, LoanMart also offers competitive interest rates and a convenient online application process, making the process of obtaining a loan simpler and more efficient for a wide range of borrowers.1 5

hard money loan

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Why Do People Apply for Hard Money Loans? 

Being stuck in a tough financial situation can lead people to search for different types of loans to get back on their feet. Here are a few reasons why an individual may choose a hard money loan:

  • Access to a Quicker Application: Hard money loans can offer a quicker application process than traditional mortgage loans. Instead of waiting weeks for a lender to process an application, a borrower may only have to wait a few days.
  • Eligibility is Not Solely Determined by Credit Score: Similar to car title loans, an applicant’s credit score isn’t the primary focus of the application process for a hard money loan, but a credit check is typically necessary to determine the applicant’s financial history. Since you are using collateral to secure the loan, the application process can be flexible even if you don’t have a perfect credit score.1

A hard money loan can help you cover the cost of significant home repairs or projects, but it’s important to carefully review all your options. Call a LoanMart title loan agent today at 855-422-7412 if you want to learn more about how to get approved for a title loan online.1

What are the Interest Rates for a Hard Money Loan?

Hard money loans are short-term loans that tend to come with higher interest rates and can be more expensive than traditional mortgage loans. Since your finances are not as rigorously reviewed when applying for hard money loans in comparison to traditional loans, the lender assumes more risk in the transaction.

While hard money loan rates can be discouraging, you can research and compare multiple options until you find the most reasonable rates available. Make sure you review each lender carefully and look out for optimal loan terms and convenient repayment options to give yourself the best loan experience possible.

If you apply for a title loan serviced by LoanMart, you can expect to receive competitive interest rates if you qualify! You can take advantage of a flexible application process, and you don’t need a perfect credit score to borrow against the value of your vehicle and access fast cash! With a title loan, you are using your vehicle title as collateral for the loan. Submit a short inquiry form online to start your quick application, or call 855-422-7412 to learn more about how car title loans work.1 3

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Why Should I Apply for a Title Loan Instead of a Hard Money Loan?

Are you stuck between choosing a title loan and a hard money loan? If you’re looking for a flexible loan with competitive rates, you may have difficulty finding that with a hard money loan. Besides competitive interest rates, some of the notable perks you could receive when choosing car title loans serviced by LoanMart are the following:1

  • A Convenient and Flexible Application Process1
  • Quick Funding in as Little as One Business Day3
  • No Prepayment Penalties5
  • No Hidden Fees5
  • Keep Driving the Car You Use as Collateral
  • Bad Credit Usually Isn’t an Issue1
  • Exceptional Customer Service

Car title loans can be a simple way to get money for home projects and avoid the headaches of a hard money loan. Not only can you expect quick funding and fast financial help, but you don’t need a high credit score to qualify for a car title loan. The application process can be a breeze, which is convenient if you’re in a hurry to access fast cash.1 3

Ready to see if your vehicle will qualify as collateral for an auto title loan? With LoanMart, applying for fast financial help has never been easier. It can take no time at all to see if you’re eligible for the quick funds you need to get back on your feet or tackle a home renovation project in the future. Dial 855-422-7412 if you’re ready to apply for a bad credit loan option like a title loan serviced by LoanMart!1 3