If you need a loan, you may go to traditional loan providers like banks and large institutions. People choose these loan providers because of reliability. Getting a bank loan is not easy because they use strict guidelines and procedures to approve loans. Some people have issues that prevent them from getting loan approval from the banks. We have compiled a list of situations where getting a hard money loan is preferable.

Higher loan amount

You can get a hard money loan if you have high-value property as you may get a loan equal to the property value. The lender will check the property value to give you the loan. It is not possible in the case of bank loans. You cannot get a loan of more than 70% of the value of the property from the bank.

Need quick approval

Banks will take many months to approve the loans because they have to do multiple background checks before giving loans. If you need a quick loan, it is better to go to the hard money lender. They may ask for documents related to the ownership and value of the property. Once you provide the documents, you may get the loan approval within a week. Some loan providers will give loan approval within a few days.

No strict guidelines

If you are taking a loan from a bank or some large institution, they will check your history, credit score, property value, the situation of the neighborhood, and the current market conditions. You have to attest all the documents before sending them to the bank. They will reject your application if you have a small mistake in the documents. The bank will never compromise on the documentation. A team of people is involved in the approval process. You cannot talk to them to explain things. Everything has to be in a documented form. If you are taking hard money loans, it will be easy to talk with the lender to explain the problems in the documents.

Low credit score

You will never get a loan from the bank if you have a low credit score. They will not approve the loan even when you have a high-value property. The situation is different with the hard money loans. In this case, the lender will not check your credit score. They are only concerned about the collateral property value and the ownership of the property.