Hard Money Lenders: The Bad Rep

Hard Money Lenders:

The Bad Rep

When, on occasion, I have heard people discussing hard money lenders there is almost always a tone of distaste in their opinion often equating them with loan sharks more then legitimate bankers. And while no one in particular likes having to have money collected from them, these lenders are simply following through in a financial agreement which you willingly entered into. For these legitimate business men and their practices to be compared to payday loans and the exorbitant interest rates they impose is a false pretense that may be keeping you from considering all your financial options.


The only reason I can see for the bad reputation that hard money lenders are saddled with is a condition of ignorance when it comes to the general publics understanding of consumer loans, such as auto and mortgage loans, because we are conditioned to consider anything other then a loan from a government backed financial institution as dangerous and sometimes even undesirable. As a result hard money has not been standardized like traditional mortgage lending, and also owing to the fact that there is a wide difference between one lender and another when it comes to service standards. The negative customer service experiences many borrowers have had in hard money, is often due to the lack of standardization in the industry.

Another reason that herd money lenders may have received a bad reputation is the increased possibility for individuals who want to scam you rather then engage in legitimate business. The lack of regulation in the area of hard money has opened it up to con artists and predators, another reason hard money has earned such a bad rep. With a careful approach however there is no reason to not consider  lenders, particularly if your credit score is damaged.