Coin loans refer to financing provided by non-institutional lenders. There are many coin lenders that offer quick financing at attractive interest rates.
As a borrower, you must thoroughly research the lender’s reputation and business, but as you do your research, you will find that hard money lenders can offer a great advantage in your search for financing for your real estate investment project.
Benefits of hard money loans
Faster Approvals: Undoubtedly, one of the main benefits of a cash loan is the fact that investors can get the pre-approval in a day or two, provided they’ve submitted the handful of documents that the lender has requested. Coin lenders primarily focus on whether the asset itself has a good market value and the borrower’s equity is at least 20%. Financing can be done in less than a week compared to regular loans which can take a month or even longer. When inquiring about hard financiers, a key question is how quickly they can fund.
Flexible Payments: With a private lender, you have more freedom to create a customized repayment plan. You don’t have that freedom at a large financial institution. Instead, you must accept the bank’s terms of payment. However, with a private lender, you can discuss and agree on a mutually acceptable repayment schedule that you think is right for you.
Fewer Requirements: When you apply for a loan from a regular financial institution, you are expected to meet many strict requirements, such as: B. Income history, experience, etc. It’s no secret that bank approvals can become a cumbersome process. Chances are you won’t be burdened with as many requirements from a coin lender. As long as you have a quality asset with at least 20% equity, chances are you’ll qualify for the loan.
No Prepayment Penalty: If you get a loan from an established bank, you can be hit with prepayment penalties if you pay off the loan before the due date. Most fix and flip lenders do not charge prepayment penalties. So if you come across extra cash and decide to pay off your loan before the due date, you can do so with confidence without worrying about being penalized for it.
Credit history isn’t a big issue: With large lending institutions, your credit history can have a big impact on whether or not you get a loan. Private lenders attach less importance to a poor credit rating. This is because a private lender bases loan approval on property value, borrower’s equity, etc. As long as you meet these criteria, you have a good chance of getting funded.
An added benefit of obtaining a loan from a bonanza lender is that as more properties are renovated in the community, property values will increase and the quality of the neighborhood will improve.