Hard Money Loans – It is one of the things that people have different perspectives. Some see it as a tool that is used by the wealthy to make good profits in a short span of time, while some see as a thing that helps people during a financial crunch. Every coin has two sides to it, and so does this. It is a boon for some, and it is a bane for the rest. In this article, we will see in detail the pros and cons of hard money loans.
Rather than starting off things with negative things, it is better to point out the positives of hard money loans
The first and the biggest advantage of hard money loans is the speed at which it reaches our hands. It is not the case when it comes to banks. The loan application has to go through lots of stages to get sanctioned. The hard money lenders would take a maximum of two weeks for the entire procedure. According to various sources some hard money lenders Los Angeles complete the entire process within a week.
The next advantage when it comes to hard money loans is flexibility. There these lenders are private bodies they do not have stick on to any rules and regulations. They can flexible in many aspects, which include repayment methods, interest rates, and a lot of other things. This is one aspect of hard money loans that have been helpful for many people in many situations.
The approval process is very simple when compared to any other financial institution. The person who is borrowing the money does have to go through different stages of clearance. The most important thing that the lenders require is collateral. If they are satisfied, the entire approval process is more like a walk in the park.
Here are some of the negatives about hard money loans
The biggest disadvantage when it comes to hard money loans is the interest rates. Their interest rates are way too high when compared to the interest rates offered by the conventional financial institutions like the banks. Since they are private lenders, it is important to know that they do not have to function within any boundaries. They have all the freedom in the world to set interest rates according to their convenience. This is one of the reasons why people have second thoughts about borrowing money from them.
The reliability factor plays a very important role when it comes to financial matters. Sadly, this is one of the issues that the predominant population has against hard money loans. It is bitter truth that it is a very hard task to find a reliable hard money lender. So when reaching out to the money lenders, it is important that they should be reliable or it can lead to many problems in the future.