Everyone, including those with bad credit, deserves some help now and then. When the cost of living exceeds your income and you need a boost to get back on your feet, Higher hardship loans for low credit could be an option for you.

Types of Loans

Hard money loans are a type of private lending product that allow borrowers to access quick funds with customized terms.  Hard money loans are often used when traditional lenders will not lend to borrowers who have less than perfect credit. The short-term nature of these loans is often preferable for borrowers in high-stress situations or who don’t have the assets or collateral (like equity) needed for traditional bank loans. While hard money loans are offered by private lenders and investors, the loans are not regulated by a government agency, like federal student loans or home equity lines of credit.

Hard money loan interest rates can be higher than traditional lending products, but that is because hard money lenders take on a lot more risk when they make a loan to you. Your ability to repay the loan may be limited by your income or your collateral (like the equity in your house), which means that you won’t be able to borrow as much as you could with a larger loan from a bank or credit union. The terms of hard money loans can be customized based on the requirements of each borrower.

Getting a Loan

The process for obtaining a hard money loan is similar to that of applying for any other type of loan. You can look for private investors and lenders who are willing to work with you on your terms. When seeking out a lender, it is imperative that you go with someone you can trust, which is why it’s important to do some research ahead of time! Ask people you know if they have ever worked with hard money lenders. Consider going with someone who has been recommended by family or friends. Shortlisting potential lenders before starting the application process will help cut down on false starts.

When applying for a loan, start by having your most recent financial documents available. This includes your income information, last two years’ tax returns, bank account statements and any other documents that are relevant to the loan. Be prepared to explain why you need the money and how you will use it.

Hard money loans can be an alternative for borrowers who have trouble qualifying with traditional banking products. While the interest rates may be higher than a product from a large bank, hard money loans can provide immediate access to funds, which is great when you’re trying to get back on your feet after a financial setback.