What Is Hard Money Lending?

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Hard money lending is when the bank giving the loan requires a piece of real estate property as collateral for a loan. Prepare to pay high interest rates for hard money loans with advice from an investment consultant in this free video on bank loans.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

Hi, I'm Roger Groh. We're here today to talk about hard money loans. What are they? How do you apply? And what sort of interest rates are you going to pay on money that you borrow that way? A hard money loan is, pretty simply, a loan that you have made where you've used real estate to collateralized it, meaning, you've borrowed against your house, or maybe a second property you own, or perhaps, a business piece of property that you own. The lender has made you collateralized it because they know that you don't qualify for a traditional bank loan. And as a result, they are going to charge you an abnormally high rate of interest, not because you're of bad credit, but because you don't have anywhere else to go. And they've got you over the barrel. Be very careful when you start to do this, and shop carefully. I'm Roger Groh, and that's a little bit about hard money loans.


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