Hard money personal loans

Posted on April 20, 2009
Filed Under Loan Information, Personal Loan | Comments Off

A loan is a kind of debt. A personal loan is a loan which is usually availed to fulfill the personal requirements of an individual. The person who avails the loan is called the borrower and the one who provides it is called the lender. The lender provides the loan for a consideration called as “interest”. Hard Money is the amount, which is lent by an investor to an individual to further invest in matters. Hard Money loan usually is for a short period. It is generally used for property needs, maintenance and repairs.

Hard money personal loans

A hard money personal loan is a personal loan in which the lender transfers the money to the borrower. It is a non-conventional type of loan. This loan is generally opted in cases where large payments are to be made. These payments could be buying a house or a car or even jewellery. This type of loans is rarely available.Usually banks and various financial organisations do not provide such loans. They are usually lent by private money lenders. Usually, a part of the value as security is advanced, to the lender. Such a loan is not preferred because of the risk involved and also because of the high rate of interest charged. There is always a lower limit fixed for a minimum sum of amount to be availed. As these loans are not the usual loans, there is no fixed terms and conditions. The terms are negotiated by the parties as per there convenience. The interest tares vary from 8% to 16%.

Hard money personal loans are of two types:-

Secured hard money personal loans - Loans that can be availed by depositing any asset worth the value of the loan, as a security.

Unsecured hard money personal loans - Loans that can be availed without depositing any security. As these loans involve great risks they are not preferred by the lenders.

Hard money personal loans are applied by :

1. An individual having a bad credit score.

2. Those persons having no credit status.

3. Defaulted earlier.

4. No income proofs and the stable income proof is available

5. Those, who need immediate refinance.

6. Those in need of short-term money.

7. Those, who do not have a complete set of required documents.

As it is easier to qualify for this loan, people prefer opting for it, even though the rate of interest is high.

Advantages Of hard money personal loans are -

Provides a large amount

Terms are negotiable

Easy documentation

Fast processing

Speedy and a less tedious procedure

Disadvantages of hard money personal loans are-

High interest rates

Hidden charges

Rarely available

Overview

Hard money personal loan is practiced, since there were not many banks and financial institutions available to the common person. Even after knowing all the disadvantages, it is highly preferred by the borrowers, as the process is faster as compared to other loans provided by banks and financial institutions.

Source : http://www.omniglot.com/om/dallas/Hard%20money%20personal%20loans.html