Are you in need of a loan fast? Do you have the ability to repay a loan quickly, but you don’t have the time to wait around for a traditional loan to come through? If this sounds a lot like the situation you’re in right now, you might be the perfect candidate for a hard money loan. A hard money loan is a loan in which you get the money you need for the reason you need it, and you have one to five years to repay the loan. It’s a short-term financial situation if you need one, and it might be just what you’re looking for.

A hard money loan is one that doesn’t work just like a traditional loan. You aren’t waiting around to find out if you’ve been approved. You’re not waiting around for the bank to call and ask for more paperwork, to ask why you have more income one month than another, to find out why you left your job and took a new one, and you’re not waiting months for traditional underwriting services to take place. With a hard money loan, you need nothing more than a piece of property that’s worth more than you owe on it, and you need a few minutes to fill out an application.

Why should I apply for a hard money loan?

There are several reasons you might choose to apply for a hard money loan rather than a traditional loan. You might want or need the money right away, and you might not have the kind of time it takes to wait for a traditional lender to process your paperwork. A traditional loan takes anywhere from four weeks to several months to fund. You’re going to wait a long time from the first time you file an application for approval, and you’re going to spend a lot of time filing paperwork.

A lender needs your income information, your employment history, your credit history, and they might want to talk to you more than once about things before they will approve you. They might even ask you to write letters or have your creditors do this on your behalf to explain why something is the way it is on your credit report or why you are in this specific situation. Then they must approve you, wait on underwriting, and then you have to close. It takes a long time, but a hard money loan lender can have money in your pocket in a few days.

It’s also easier to get an approval if you have questionable financial habits. If you have a low credit score or you move around employment all the time, you can still get an approval for a hard money loan so long as you have collateral the lender finds appealing. They don’t care so much about what you are doing in your financial life and if you can repay the loan as much as they care about the collateral you have to offer.

Finally, the most appealing thing about a hard money loan is you get to borrow from someone who wants to get to know you and listen to you. Instead of a bank that doesn’t care why this or that happened in your future, a hard money lender is going to hear you out. You get to explain why you’re in your situation, what is going on, and what this money means to you. That means you have a better chance of being approved.

Why should I not apply for a hard money loan?

There are some drawbacks to this kind of loan you should be aware of. First, they are expensive. Hard money lenders might not care about your credit score as much as a traditional lender, but they do look at it. They will base the interest rate you’re paying off of this number, and it might be exceptionally high. It’s high even if you have a high credit score simply because these are short-term loans with more to lose. If you cannot repay the loan and you know it, it’s a bad idea to apply for it.

If you aren’t in desperate need of a loan right this second, don’t apply for a hard money loan. Go the more traditional route for a long repayment period, for a lower interest rate, and for a much better loan experience. If you have the money to pay off the loan or you know you will have it shortly, this might be the perfect option for you. Know what you’re getting into before you sign anything, and then go from there. You might just find you have a good chance working with a hard money loan lender.