The hard money loan is a private loan in which actual cash is transferred from the lender to the borrower for the purpose of making a large purchase, usually a real estate purpose. The hard money loan is unusual because of the large transfer of hard money rather than the exchange of money through seller or lender carrying on the home. The hard money loan is a risky loan for lenders and often comes with a high interest rate. However, because the hard money loan is a private loan, the terms and agreements of the hard money loan are generally negotiable.

Understanding the hard money loan

The hard money loan is often expressed in complex real estate terminology which makes it difficult to understand but the hard money loan is actually a very simple concept. It is the provision of an actual cash loan made to a borrower by a private lender. The hard money loan is not subject to the stringent guidelines of a federal or conglomerate lending institution and is therefore negotiable with the lender.

People who apply for the hard money loan

The hard money loan is a private loan which does not require the same stringent guidelines as other loan types. For this reason, the hard money loan is often sought by people who: