Over the years, hard money loans have become quite popular among investors looking for flexible financing options to fund their investments. The speed of processing hard money loans and the minimal requirements needed make these loans attractive, especially among real estate investors.

Unlike traditional bank loans, private money lenders offering hard money loans set their own lending rules and regulations. These loans have a shorter repayment period and slightly higher interest rates. The property to be purchased is also used as collateral. Hence the lenders do not focus much on the borrower’s credit history. 

Private money lenders also have a short and simple underwriting process, making the loan application and processing fast and reliable. Below, we have discussed some steps that will help you when finding hard money lenders. Keep reading to get started. 

What Are Hard Money Lenders?

Hard money loan lenders are private money lending companies that offer loans to individual or company investors in the real estate space. Every lender has some lending requirements that investors must meet before qualifying for a loan. Generally, these lenders will consider the investor’s real estate experience, the property’s value, and the borrower’s overall financial strength.

A real estate investor who wants to secure a good deal in the market will need immediate financing, often within a few days. With such deals, traditional financing options are too slow, thanks to the high competition from other investors. Therefore, hard money lenders provide the speed and convenience needed to close high-in-demand deals.

And regardless of the investment property you want to buy, you’ll always find the best hard money loan lenders that meet your investment needs. You just have to do thorough research in selecting the best lenders in the flooded market. Below are the key factors to look for in a private money lender.

What Makes A Good Hard Money Loan?

Before we look at how to find hard money lenders for real estate, we’ll first need to know what makes a great hard money loan lender. For most investors, a great lender will offer affordable rates, flexible terms, and faster loan processing. And while these are some of the key factors to consider, they aren’t the only ones. Here are the main aspects you should keep in mind throughout the lender selection process. 


Everyone wants to work with a reputed lender who will stick to their word and honor the lending terms and conditions. One way to score the reputation of a hard money lender is to check their years of experience in the lending business. A great lender is popular among real estate investors and has earned their trust. They also tend to have a loyal customer base and favorable lending terms, thanks to the high number of repeat clients. 

Working with a reputed lender boosts your confidence. You’ll also have some peace of mind knowing that the lender is licensed, trustworthy, and insured. And like most mortgage lenders, hard money loan lenders are cautious of losing their best customers. So they will often listen to their clients and customize their services to suit their unique needs. 


Since most private money lenders do not look at the credit history, they take on more risk in their lending business. This increased risk comes with a higher cost in the form of fees and slightly higher rates. However, some lenders charge higher fees than others. A good way to check the lender’s fees is to ask for a full disclosure of the rates and any fees during the application process. 

You don’t want to apply for private money loans with higher-than-usual rates or several hidden fees. This is a huge mistake that will increase the cost of your loan, eventually eating into your profits. Besides the fees and rates, you should also ask if there are any penalties associated with the loan. For instance, some traditional and even private lenders charge a penalty for repaying the loan before it matures. This can be quite inconvenient for investors who want to clear their loans before moving to other projects. 

Speed and Simplicity

One of the major benefits of a hard money loan is the speed at which it’s processed. Unlike traditional mortgage or even credit card loans, hard money loans are often processed and funded within a week, if not days. This means investors can quickly close deals and move on to other investment projects.

Before applying for a hard money loan, ensure the lender will fund your project within a week or two. That said, fast loan processing doesn’t equal higher fees or strict terms and conditions. So always be on the lookout for opportunists using fast processing speeds to exploit desperate and unsuspecting investors.

The ease of loan application is another critical factor to consider. You don’t want to work with a lender with complicated loan application processes and inefficient bureaucratic procedures. 

 Client Experience

Client experience encompasses everything from how the private lender communicates with clients to how fast the loans are processed. The best hard money lenders treat their clients well and ensure their needs are taken seriously. One way to gauge the level of client experience is to check how streamlined and user-friendly the loan application process is. 

Similarly, the lender should be flexible enough to adjust their loan terms, from fees and penalties to the repayment period. Every real estate investor wants their unique needs and preferences considered, and the best lenders will make this possible for their clients.  

Finding Reliable Hard Money Loan Lenders

Now that you know the key aspects to prioritize when looking for hard money lenders, you must keenly compare the different lenders, score them, and choose the best one to work with. Here are some tips you can borrow to streamline the selection process. 

Ask Around

The easiest and most reliable way to find the best hard money loan lenders is to ask for recommendations from fellow investors. A word-of-mouth referral is often accurate and reliable if the person you ask has some experience in the market and is close to you. Always inquire about the types of rental properties the lender accepts, the rates, processing speeds, fees, etc. That way, you’ll have enough data points to score the best lenders. 

Check Customer Reviews

Once you have a couple of lenders in mind, you should proceed to do further research on the quality of their services. A good place to start is to browse some reputed third-party sites and check the reviews left by past customers. The best lenders will have more positive reviews and will even respond to negative reviews in a genuine and business-like manner. You should also take every review or comment with a pinch of salt. Remember, some lenders may hire people to write positive reviews for their companies so as to boost their brand reputation. 

Book an Interview

Investing in a rental property is a huge commitment, so you should be ready to go the extra mile to secure the right financing. This could mean scheduling interviews with different lenders to ensure you make the right choices. During the interview, ask more about the terms and conditions, the fees, and penalties, if any. You should also pay attention to the lender’s communication skills and how well they respond to questions. 

Look out for Red Flags

During the interview or afterward, you can visit the lender’s website to check if what they offer matches what they promise on the site. Some lenders tend to exaggerate the extent of their services only to give excuses afterward. For instance, the lender may promise lower rates and loan closing within 7 days only to add some fees and close the loan in two weeks. 

To avoid such, you should know how to find hard money lender terms. That way, you can ask for further clarification to ensure that the lender won’t give excuses or change their mind somewhere along the way. Some of the red flags to look out for include:

  • Lower rates are often below 6%. This often means there’s something the lender isn’t disclosing. Either there are several hidden fees, or they will suddenly update the rates later on.
  • Poorly-articulated terms and conditions. This invites confusion and creates room for exploitation.
  • Too-good-to-be-true requirements/procedures. If the lender doesn’t require collateral or has the bare minimum screening procedures, you should take time to question their business model.
  • High upfront fees. New lenders that charge high upfront fees, often above a thousand dollars as application fees or for speeding up the closing process, could be typical scammers.  

Boost Your Investments with Hard Money Loans

Hard money loans offer a great investment opportunity for real estate investors looking for a quick and flexible financing option. The loans come with slightly higher rates, but the quick processing speed and convenience outweigh that extra cost. That said, hard money loans are best used for investment purposes due to the short repayment period. 

Whether you are a new or veteran real estate investor, hard money loans will work for you. The option to close these loans in a few days means you can secure great deals before your competitors without incurring extra costs. However, all these benefits begin with choosing the right lender. The tips we’ve highlighted above aren’t exhaustive but will give you an idea of what to look for the next time you need a hard money loan.