How Do You Qualify For Hard Money Equity Loans?

hard money equity loans

Hard money loans are simply short term loans which are secured by real estate. The terms and requirements can vary from lender to lender; it means not all private lenders have the same strategy for the different projects.

However, it is different from a traditional loan like a hard money loan is an underwriting process for real estate investors. But the term hard money has a much quicker process than the chartered banks. Since a Private Money Construction Loans are interested in investing in property value than the finance amount, so it will take less time to deal with your mortgage amount.

What is a hard money lender?

A hard money lender or a private money lender is the same, and it can consist of an ongoing funding stream. It is a non-institutional individual or a private company that lends money, and it is under safe custody by a note and deed of trust. Its purpose of funding when the borrower wants an instant loan with a low credit score. In other words, a private money lender is the first option for people who are having difficulty getting loans, usually at a higher interest rate. It provides smaller and short term loans that are suitable for immediate financial needs. Although, the Hard Money Lenders seek a chance to get a higher interest rate of their money. As it is, real investors seek an opportunity to finance their deals, so this way lender and borrower fulfill each other requirements.

Why get a hard money loan?

One of the most significant choices for real estate investors is Private Money Construction Loans. However, real estate investors spend days, weeks, months, to find their next deal, but it is worth when they have funds to purchase it.

As we know, traditional banks are only interested in people who have high credit scores. Some borrowers have a low credit score, so these people choose private lenders over chartered banks. Likewise, sometimes the bank becomes more delicate about “what is the reason you are borrowing money for” and a private lender might be not. In case an emergency arises, and you want an amount to cover your bills and pay for your groceries, a private lender will help you out from your financial problems.

There are several strong reasons why people choose a hard money loan than the banks; let’s check out:

  • If you have a great property deal in your hand and have less time to get involved in a lengthy bank loan process, then you may choose a hard money loan.

  • When you have a low credit score or your income history doesn’t satisfy the bank, then Hard Money Lenders will be the best option.

  • If you do not have much cash for your next deal and you unable to approach private financing from your friends and relatives.

  • When you want to fix a house and flip it, then it requires guaranteed access to finance such as hard money loans. It will help you to find a perfect-match loan for your existing project.

How to Get a Hard Money Loan Approval?

Usually, if you have thought to approve your loan through a traditional bank, it will take a painfully slow process. Meanwhile, a hard money lender consists of a faster and earliest process. Similarly, A borrower can get a hard money Equity loan on any property, so there are no worries to finance your deal. It is a simple process to get approval from a hard money loan, check out one by one:

  1. First of all, you have to select a particular project you want to deal with. Then you may research a lender that is willing to fund your profitable deal.

  1. After hiring a private lender, write a summary of your project. It should include the request of amount, the reason for lending amount, a project timeline, and other investments if you have made to the project.

  1. Fill out the loan application by providing complete personal financial statements and an accurate summary of your finances. You also have to show the present potential value of the property you want to buy. ( as a hard money loan finance borrower based on the collateral value of their property)

  1. However, attach some pictures of your property and present a simple financial plan for your home project; it will help to approve your loan fast.

  1. Before signing any paperwork from a hard money lender, make sure your legal interests are protected.

  1. In the last, remain in constant contact with your Money Lender Online and finance your deal at the time.

Hard Money Equity Loans: Understanding Bad Credit Loan Consolidation

Further, obtaining a Consolidation loan will help you to cover up your due debts. For instance, people can take home equity loans and use its money to repay other debts. You can combine your debts and make one payment rather than paying several fees for similar debts, yes. It is possible with “Debt Consolidation” But the question is how to get a Consolidation loan with poor credit score? Don’t worry, here are some ways that help you to get a Consolidation loan:

  • Check out your credit score and monitor it

  • Various hard money lenders offer debt consolidation loans for bad credit score, so try to find the right one.

  • Afterward, consider a secured hard money lender.

  • Ask your family or friend to co-sign with stellar credit; this will help you to improve the chances of getting a consolidation loan.

What are the Pros and cons of hard money loans?

If you are going to choose hard money for your upcoming projects, then you must consider its Pros and cons.

Pros of a hard money loans

Speed: You do not need to wait longer than a week if you apply for a hard money loan.

Flexibility: As mentioned above, every private lender consists of its criteria for the different real estate projects. Usually, a hard money lenders are more flexible and accept every kind of property to invest money in that.

Cons of a hard money loans

Interest rates: The hard money loans are more expensive than traditional banks. Likewise, if you have a poor credit score, then hard money lenders will attach some high-interest rates.

Must be paid back quickly: It is a short- term loan, so it requires to repay within a short period as you have discussed with the lender. Otherwise, they will disturb your project. A hard money lender has the right to seize whatever you offered as collateral to recoup their losses.


Now, it’s your decision which way is more convenient for your future projects. A hard money loan will satisfy your borrowing needs for your business and personal needs as well. Kala lending can be the right place for you; we deal with each kind of properties. If you want to know our further offers, then contact us 808-883-2747.