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How money loans help people handle financial emergencies

Everyone faces emergency situations sometimes in their life. Unfortunately, these situations always entail unexpected expenses which push one’s personal finance over the edge. If you’re going through a financial hardship, then taking out a money loan would be the most convenient and fastest way of getting out of this situation. Whether you’re facing a car-repair emergency, huge medical bill or outstanding credit card debts, with the help of a money loan you can cope with any of these financial emergencies and get back on your feet soon. Money loans are especially helpful if you have a poor credit rating, as conventional lenders like banks and credit unions won’t offer low interest loans to the applicants with bad credit. In fact, most of the times, the credit rating makes the difference between getting a deal done and not. However, in case of private money loans, credit rating doesn’t make any difference, as such lenders don’t consider this as a qualifying factor.

Basics of money loans

Money loans, also known as hard money loans, are asset-based loans. These loans help to fill up an important need for the borrowers when the credit is very tight. Although this is an easy and convenient loan option, yet it is expensive and risky. Such loans as well as the loan providers should be handled very carefully to get the best out of them.

  • Definition – Money loans are secured short-term loans with higher interest rates than conventional sub-prime loans offered by private lenders who see these high-risk ventures as valued ones. These loans are secured by the value of a property, not by the borrower’s credit worthiness. Such loans have lower loan-to-value ratios than conventional loans.

  • Significance - Since such loans are offered with much higher interest rates than conventional loans, many people consider this as the last haven. However, when the credit is questionable, money loans work the best. Moreover, such loans can be obtainable faster while compared to conventional loans. For these reasons money loans are immensely popular not only among individual borrowers, but also among the professional investors.

  • Nature – Money loans, sometimes also called as private loans, are generally provided by individual private lenders or a group of lenders instead of large financial institutions such as banks or credit unions. A typical money loan provider wants to get higher return on his investment than what he gets from banks or mutual funds. Money loan is a short term loan, which is generally offered for one year or less.

  • Types – The most common types of money loans are mortgage refinancing, bridge loans, credit card cash advance loans and equity loans.

  • AdvantagesMoney loans are beneficial to both the lender and borrower. A lender earns higher interest rates than typical investments. While to a borrower, the main benefit of a money loans is that the loan is readily, easily, quickly and conveniently available. Moreover it doesn’t require the borrower to do huge paperwork. These loans are especially beneficial to the borrowers who are declined by the conventional lending institutions due to poor credit rating.

  • Disadvantages – Although hard money loans have many advantages, yet they have some disadvantages too. Such loans always come with higher interest rates than traditional loans. Moreover, the loans entail additional fees. The most drastic factor about a money loan is that if a borrower fails to pay back the loan, he may lose the property which the loan is secured by. Therefore, a borrower should balance these points against the advantages of getting this easily available loan.

Qualifying criteria

The lenders of money loans consider some factors while deciding whether or not to approve a loan application. Here are the factors.

  • Property value – The value of the asset or property which the hard money loan is secured against is the primary qualifying factor. The lenders want to ensure if the value of the property is enough to recover their money in case the borrowers fail to repay the loan. The lenders provide money loans to the borrowers with poor credit, but substantial asset equity.

  • Borrower’s income and credit status – Although some money lenders consider the borrowers’ income and credit status in order to approve and disburse the loan, yet these are secondary factors to the property value.

How to apply for the loan

Money loans are short-term high interest rates loans. Before you opt for a money loan, you must chalk out a repayment plan; otherwise, you may have to face unforeseen and unwanted situations in future. Here are the points that you must check prior to applying for such a loan.

  • Credit score – Although credit score of the borrower is not considered as a qualifying factor by most of the lenders, yet monitoring your credit score would help you have a grasp over your ability to repay the loan. Get a copy of your credit report and review it thoroughly to find discrepancies. Dispute the discrepancies to the concerning personnel to make your credit report error-free. An error-free credit report would help you improve your credit score.

  • Documents – Gather all financial as well as personal identification documents before you approach a private money lender. The lender is likely to check these documents while processing the loan application.

  • Portfolio of information – You must create a portfolio of required information on the asset you’re going to use as collateral. The information may include comprehensive ownership history and the appraised value of the property to evaluate the LTV ratio.

When looking for the best money loans with the best interest rates and the good terms, you must shop around. You can also work with an online money lender.

We are a one-stop, legitimate, online source of money loans. You can surely depend on us while looking for a money loan.



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