If you have noticed that you have a bad credit score and that you do not qualify for a bank loan, another great option for you would be to consider a hard money loan.
If you are considering hard money lending, this short article will be able to help you distinguish between the pros and cons that come with this type of hard money lending.
They will be able to guide you and help you make your decision when it comes to this financial situation that you may be going through.
The pros of a hard money loan:
1.) One very important pro that comes with a hard money loan is the amount of time that the application process takes. For the most part, it only takes about 1 to 2 days to have the. Application completed.
If you have been approved, you will be able to have access to the money within a week. For many things, it takes up to two months to get the application process started. This can be very inconvenient for the person who needs the money as soon as possible.
2.) Another important pro that comes with a hard money loan is the amount of flexibility that most of these agencies have. Most of the time, being so are other agencies require you to have good references or to have a good credit score.
With Hard money lending, you do not need to have a good credit score, and you will be automatically approved. This can definitely be a great advantage for the individual who is trying to take out a loan.
The cons of hard money loan:
1.) A con of hard money loans is that the interest rates are very high. In most cases, interest rates in a hard money loan can be higher than what a bank loan interest rate would be. This can really affect the amount of money that you will have to pay back in the future. It is definitely important that you consider this downside because this will mean that you will have to spend a lot more money than a regular loan.
2.) Another downside of a hard money loan is that he needs to be paid back quickly. Hard money loans or short term loans that need to be paid off in a year or less.
However, they do offer flexibility so if you do require more time they will be able to work with you. For the most part though, it is important that you figure out a payment plan so that you were able to pay off the loan as quickly as possible.
The longer that you take to pay off the loan, the higher that the interest rates will start to get. This can make it harder for you to pay off the loan and it can also severely affect your credit score as well.
Taking out any type of loan can be something intimidating and frustrating for many individuals. Usually, many individuals like to stay away from any type of loans because they do not like to be in debt.
However, sometimes loans are necessary depending on your financial situation and it is important to be aware of all of your options that you have. Taking out a hard money loan has both benefits and downsides to it.
It is always recommended that you do your own research so that you were able to make the best decision that will be able to benefit your specific situation the most. Looking at the pros and the cons list above, will be able to help you make the decision quickly and efficiently.