You need money to invest in real estate, shares or to increase the items in your asset column. However, there may be instances where you do not have enough cash upfront to seal a deal. In this case, you seek out banks and individuals for loans. While that has been a traditional option for a long time, it does have downsides. A conventional bank loan may take a lot of time to get approved. Chances are they have a tiringly long process that involves multiple physical visits, that might not be feasible. Thankfully, there are other options. One such option is to acquire a hard loan from private money lenders. A personal loan has several upsides, which make it one of the most popular options in the present world.
Why choose a hard money loan?
- A credit score does not matter: Traditional funding requires you to have a decent credit score. In most cases, you will need to have a score of 600 and beyond to be eligible for any loans. This renders a lot of people with a poor credit score history ineligible for acquitting the loan. However, this is not the case with hard loans. A hard loan does not require assessing your previous credit score history. This makes hard money loans open to a wider audience. Not only this, but your previous history is also not considered unless it is faulty. Moreover, a hard money loan is a good way to boost your credit score. When you take a loan and repay it on time, it counts towards the increase in your credit card score. In short, a hard money loan is a solution to a lot of your problems.
- Lending is done locally: Banks have heavy traffic. Thousands of people apply for a bank loan regularly. And the bank must look after all proposals. However, a hard money lender funds local businesses and is engaged in their profit-making process. This is to say that a hard lender would fund locally and want to be aware of how the business is doing. This enables local people to have a shot at their business without waiting.
- Quick funding: Traditional funding takes anywhere between three to six months. This includes identification, background check, credit card details, income history, and so on. The amount of time it takes to approve a traditional loan is enough to have your golden opportunity taken away from you. This is the reason why people in need of immediate money prefer hard money lending. The process is quick, hassle-free, and is based on verdict and trust rather than an intensive background check. This does not mean the money is lent to anyone. The money is lent to potential people without going through an extensive background check on their monetary history.
- Flexible: If you take a loan from a bank, there are a set of fixed terms and instructions. You need to adhere to the manual that comes along with the loan. However, in the case of hard money loans, the terms are flexible. In traditional loans, if you repay your loan earlier than speculated, you must pay a fee. This is not the case with hard money loans. You can negotiate the rates, the time limit and request an extension for repayment if you need it. In any case, you would not be required to have an extra fine if you need changes in the terms and conditions of the contract. You have control over the contract to a large extent which lets you shift the deal more into your favor.
