What is a Hard Money Loan?


If you are interested in investment and real estate, you may have heard about a financing option called ” Hard money loans.” Oftentimes investment topics, especially real estate are filled with jargon and complex terms, so you may find yourself wondering, “exactly what is a hard money loan?” This article will answer that question.

Hard money loans are loans which are guaranteed by the physical assets the person taking the loan possess. For most people, this will be something such as a house.

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The primary advantage of a hard money loan is the speed in which one can get access to the money. While a traditional mortgage from a local bank, credit union, or other financial institution may take up to several weeks, you may be able to get a hard money loan within 7-8 days. When attempting to purchase real estate, time is of the essence, and those precious few weeks may be the difference between closing a deal and missing out on the opportunity of a lifetime. While you will have to pay a premium for the quick service of the loan, it may be well worth it to consider finding a private money lender.

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