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Everyone is usually faced with the need to borrow money for various reasons at some point in life and there are so many lenders you can turn during such a time. Among the lenders you can consider are hard money lenders who unlike traditional lending institutions are only interested on what you have to provide as collateral for the loan. Even though borrowing from banks and other financial institutions is the most popular method, hard money loans have some incredible benefits too. On that note, the following are some of the incredible benefits of hard money loans.
Quick approval; if you apply for a bank loan or from any other financial institution you may have to wait for several weeks to get which means it cannot help you if it was an emergency but qualification for a hard money loan is almost instant. As long as the value of your asset is more than the amount of loan plus the interest it will earn, you can qualify for a hard money loan within a couple of hours.
If you are locked out of a traditional loan due to bad credit score or poor history, you can always turn to hard money loans where that does not play a part; your ticket to qualifying for a loan is the value of collateral you are offering. When you apply for a hard money loan, the lender will consider your loan-to-value ratio and in case you fail to keep your part of the bargain the property can be sold to recover the loan plus interest.
You will enjoy freedom and flexibility with hard money loans that you will rarely enjoy when dealing with conventional loans; you are limited on one loan from a hard money lender provided you can provide another collateral, you can work out new terms with the lender. A collateral that you can claim at least twenty percent liquidity on is all you need to qualify for a hard money loan; income and financial history and other documents are not needed here.
We are all familiar with the penalties imposed by banks and other financial institutions for failure to repay your loan on time but such penalties do not apply to hard money loans. Hard money loans are beneficial because they help you avoid losing investment opportunities that require you to have funds ready and this is largely due to their quick approval. If you have never considered applying for a hard money loan, these are the reasons to opt for them net time you find yourself in need of funding.
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