--- title: "3 Advantages of Hard Money Borrowing: What’s in it for You?" description: Hard money loans often have higher interest rates, but can be a great option for certain buyers. Here are 3 advantages of hard money borrowing image: https://www.trustdeedcapital.com/hs-fs/hub/115318/file-1445049947.jpg --- [![Trust Deed Capital](https://www.trustdeedcapital.com/hs-fs/file-16494019-png/images/trust-deed-capital-logo.png "Trust Deed Capital")](https://www.trustdeedcapital.com/) CALL 1 (888) 563-5588 Search ![Hard Money Lender Investors](https://www.trustdeedcapital.com/hs-fs/images/blog.png) ## [3 Advantages of Hard Money Borrowing: What’s in it for You?](https://www.trustdeedcapital.com/blog/3-advantages-of-hard-money-borrowing-what’s-in-it-for-you) Posted by [Ken Meyer](https://www.trustdeedcapital.com/blog/author/ken-meyer) on Tue, Aug 12, 2014 - [Tweet](https://twitter.com/share) ![hard money borrowing](https://www.trustdeedcapital.com/hs-fs/hub/115318/file-1445049947.jpg?width=250&name=file-1445049947.jpg "hard money borrowing")A [hard money loan](https://www.trustdeedcapital.com/loan-programs) is a type of financing where the funds are offered by private investors or companies and are secured by real estate. They may come with some of the same qualification criteria as a conventional loan, including credit score and income analysis, but will more often be based on the value of the real estate that will be used as collateral. Typically, hard money loans will go up to about 70% of the purchase price. Some people are hesitant to explore hard money loans because they tend to have higher interest rates, but you should not base your decision on interest rates alone. In fact, hard money loans can be a worthwhile option for certain buyers. Here are 3 advantages of [hard money borrowing](https://www.trustdeedcapital.com/blog/bid/85252/Hard-Money-Lending-for-Fix-and-Flip-Real-Estate-Investments): what’s in it for you? # Speed [Private lenders](https://www.trustdeedcapital.com/blog/bid/131314/8-Reasons-to-Use-Private-Lenders-for-Real-Estate-Investments) often move faster than traditional banks. They require less peripheral documentation than traditional banks because they are looking primarily at the liquidation value of the property in question. Anyone who has had to submit childcare expenses or make multiple appointments to deliver documents to traditional lending institutions in triplicate will appreciate being able to bypass the nonsense and get to work on their project faster. These loans are also likely to come with shorter terms. Instead of taking on payments for 15, 20, or even 30 years, [hard money loan terms](https://www.trustdeedcapital.com/borrower-faq) can range from 6 months to 5 or 6 years. # Flexibility Conventional loans take a single-minded approach to repayment terms and collateral release agreements. This is because they are required to evaluate the terms of a loan against non-negotiable criteria. If those criteria are not met, the loan will not be issued. [Hard money lenders](https://www.trustdeedcapital.com/blog/bid/156200/Private-Hard-Money-Lenders-The-Different-Lenders-And-How-They-Operate) are not subject to those requirements and criteria, and therefore have the freedom to structure hard money agreements in ways that more closely align with your individual needs and situation. # Pre-payment Penalties? One of the most annoying aspects to traditional lending is being punished for pre-payment. Scores of first time buyers are shocked to find out that trying to exceed their payment schedule will cost them additional money. That's why [experienced borrowers](https://www.trustdeedcapital.com/borrowers) often seek a better solution. With a private lender you may be able to avoid these extra penalties and fees. Be sure to discuss and clarify the company policy on pre-payment during the loan structure phase. At Trust Deed Capital we are experienced and trusted hard money lenders. 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