Talking of the similarities between hard money and private money loans
- Both private and hard money loans are asset-based. As independent on the real estate property value held as collateral.
- The real estate property pledged as collateral backs the loans, greater than the monetary credentials of the borrower availing the loan.
- Lastly, both the loans are a form of non-traditional lending source, contrary to bank loans.
The major difference between private and hard money loans lies in the organizational structures and its working. It includes:
- Hard money lenders own organized businesses and hold a license to provide hard money. On the other hand, Private money lenders, are just private. Anyone, in the family, a friend, family, or a business associate can become a private money lender. He will lend you the respective funds, which can sometimes be accompanied by an agreement. For others, private money lending is totally performed based on trust.
- Hard money loan is easier to avail than private money loans. A Private money lender does not advertise his service. They can either be a part of your group or can be known through-world-of-the-mouth. It is all a matter of chance. Hard money lenders, on the contrary, often market their services. It makes a good opportunity to advertise the services, being offered to the masses. And so a hard money lender is easier to find with no hassle to secure a loan.
- Hard money loan providers set criteria that a borrower needs to fulfill before being authorized a loan. The hard money lender has a specific interest rate, with an appropriate time duration, for which the loan is being allotted. All the details are explained to the borrower, before the grant of the loan amount. Understanding the set criteria is very important when selecting a hard money lender. A rate of interest, loan duration, lending limits, are topics that are open to discussion.
The best way to find a hard money lender is by seeking help from an online platform. Get what you want out of your loan. If you are seeking a hard money lender or want to know more about private money and hard money lenders, seek assistance from Syberloans.com. It offers a long list of hard money lenders in the state.