Hard money lenders can approve and fund a loan at a much faster rate and with far less documentation than a bank. Approval and funding from a hard money lender can be completed within a week. A typical loan from a bank or conventional lender will often take at least 30 to 45 days for approval and funding.
Hard money lenders are primarily focused on the value of the real estate that will serve as collateral for the loan and the loan to value ratio. Banks typically focus on the borrower’s credit rating, income and employment history.
Hard money loans are intended to be short-term loans (1-4 years) while banks offer loan terms up to 30 years. Interest rates from banks will be lower compared to rates offered by hard money lenders.