Hard Money Loan Calculator
Hard money is fast and easy to qualify for — but expensive. See the true cost of your fix-and-flip loan with points, interest-only payments, and the effective APR.
How hard money works
Hard money loans are short-term, asset-based loans used primarily for fix-and-flip and BRRRR deals. They close in 5-14 days (vs 30-45 for conventional), require minimal income documentation, and the lender mostly underwrites the property itself — not you.
The catch: they're expensive. Typical 2026 terms run 9.5-12% interest with 1.5-3 origination points, on 6-18 month terms. The all-in cost of capital is usually 14-22% annualized.
What you actually pay
- Interest rate — usually 9.5-12%, charged monthly. Most loans are interest-only, meaning your monthly payment only covers interest.
- Origination points — 1 point = 1% of the loan amount, paid at closing. 1.5-3 points is typical.
- Other fees — doc prep, appraisal, processing, draw inspection fees can add $1,500-3,500.
- Exit fees / prepayment penalties — some lenders charge a fee when you pay off, especially if you pay early.
A $200,000 loan at 10.5% interest, 2.5 points, $1,800 other fees, interest-only, held for 6 months.
That 17.3% is the real cost — much higher than the stated 10.5% rate, because the points and fees get spread over a short hold period. The shorter you hold, the worse the APR.
When hard money makes sense (and when it doesn't)
Use it when:
- You need to close fast (auctions, distressed sellers, competitive markets)
- The property won't qualify for conventional (uninhabitable, major deferred maintenance)
- You're doing a fix-and-flip and will exit in <12 months
- You can't document income for a conventional loan
- You're doing a BRRRR and will refi out within 6-12 months
Skip it when:
- You qualify for a DSCR or conventional investor loan — they're 3-5% cheaper
- You plan to hold long-term (the cost compounds badly past 12 months)
- Your deal's margin is thin (the all-in cost will eat your profit)
- You can wait 30-45 days to close (then conventional always wins)
How to get the best hard money terms
- Shop 5+ lenders. Rates and points vary dramatically between lenders for the same deal.
- Track record discounts. Once you've completed 2-3 flips with a lender, ask for lower points.
- Cross-collateralize if you have other properties — getting more security usually shaves 0.5-1.5% off the rate.
- Bigger down payment — putting 25-30% down instead of 10-15% can save 1-2 points and 1% on the rate.
- Match the term to your plan. Don't take a 6-month loan for a deal that's realistically 9 months; the extension fees are brutal.
Frequently asked questions
Who funds hard money loans?
Private investors and lending funds. Big national names like Kiavi, LendingOne, Lima One Capital, and RCN Capital lend nationally. Local lenders are usually flexible on terms but slower. Private individuals (often other investors) sometimes lend at the lowest rates if you have a relationship.
Will hard money show on my credit?
Usually yes if it's from a regulated lender — pulled and reported just like a conventional mortgage. Pure private lenders (individuals) often don't report. Either way, the loan affects your debt-to-income for future conventional applications.
What's the difference between hard money and a DSCR loan?
DSCR loans are longer-term (30 years), rely on rental income coverage (1.0-1.25× DSCR), close in 30-45 days, and run 6.5-8% with 1-2 points. They're for buy-and-hold rentals. Hard money is short-term (6-18 months), closes in 1-2 weeks, runs 9.5-12% with 1.5-3 points, and is for flips or BRRRR pre-refi.
Do I still need a down payment?
Yes — typically 10-25% down. Most hard money lenders cap at 70-80% Loan-to-Cost (purchase + rehab) or 65-75% Loan-to-ARV (whichever is lower). Don't expect 100% financing; the few lenders who offer it charge a steep premium for the privilege.
What happens if I can't pay it off in time?
Most lenders offer 3-6 month extensions for an additional 1-2 points. After that, default is on the table — and hard money defaults move fast because the lender's only collateral is the property. Get an extension agreement in writing before your maturity date passes.
Hard money terms vary widely. Always read the entire loan agreement, especially around prepayment penalties, extension fees, and default triggers. The cheapest loan isn't always the best — lender reliability matters when you need to close fast.