If you are thinking about borrowing a loan from a bank or any financial institution any time in the near future, you may need to do your research before you submit your application for approval Because of the large number of different types of loans that you can apply fo these days, you need to know the distinctions between each to find the best loan suited for your needs. This is especially the case for consumers who are interested in borrowing a hard money loan.
That being said, you should also know that hard money loans have become a growing trend in recent years. Since many of today’s banks and financial institutions are often reluctant to approve loans for individuals and organizations who have poor credit scores, hard money loans are helping to feel in the gap for this need. Therefore, for those of you who may think this is a viable option for you, here are 3 things you need to know about borrowing hard money loan.
1. Asset-Based Loans – Secured Loans
Before you can borrow a hard money loan San Antonio, you need to know before you apply that is it an asset-based (secured ) loan. Simply put, you will not be approved for this type of loan if you do not have some type property to use as your security. For instance, if you want to borrow $20,000 dollars, your property must be worth at least $40,000, which is 50% of the loan’s value. The percentage requirement that is needed for your property is based on the lender and other factors. So, the range in value may start at 50% and range as high 70% security for your loan
2. Approval Time Shorter than the Traditional Bank
A hard money loan San Antonio is much more attractive, in some cases than the traditional bank loan. This is because the traditional bank loan approval requirements may take up to 30 days, while the hard money loan may be approved in as little as 2 to 3 days. Therefore, for borrows who need a quick solution to their money problems, this factor is a better option for them.
3. Higher Interest Rates Charged
Since these lenders are taking higher risks in lending their finances to borrowers, they are also charging higher interest rates than the banks. So, if someone borrows a hard money loan, the overall total cost of these must be taken into prior to using this type of secured loan.