--- title: "Private Money Loans vs. Hard Money Loans : INSIGNIA Financial Services" description: Hard Money and Private Money Loans for Real Estate Investors image: https://m.insigniafs.com/hubfs/Imported_Blog_Media/eric-brehm-X3a6o6Rs0kw-unsplash-1.jpg --- [Skip to content](https://m.insigniafs.com/cre-finance-insights/private-money-loans-vs-hard-money-loans#main-content) ![INSIGNIA 002B67 2023 (200X74 px) Trans](https://m.insigniafs.com/hs-fs/hubfs/INSIGNIA%20002B67%202023%20(200X74%20px)%20Trans.png?width=200&height=74&name=INSIGNIA%20002B67%202023%20(200X74%20px)%20Trans.png) Open main navigation Close main navigation - [Contact us](https://insigniafs.com/contact/) [Contact us](https://insigniafs.com/contact/) Nov 26, 2022 4:51:11 PM # Private Money Loans vs. Hard Money Loans [John Morelli](https://m.insigniafs.com/cre-finance-insights/author/john-morelli) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://m.insigniafs.com/cre-finance-insights/private-money-loans-vs-hard-money-loans) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://m.insigniafs.com/cre-finance-insights/private-money-loans-vs-hard-money-loans) [Twitter icon](https://twitter.com/intent/tweet?url=https://m.insigniafs.com/cre-finance-insights/private-money-loans-vs-hard-money-loans) [envelope icon](mailto:?body=https://m.insigniafs.com/cre-finance-insights/private-money-loans-vs-hard-money-loans) ## Introduction If you’re a real estate investor or small commercial property owner, chances are that you’ve heard about hard money loans and private money loans. Both forms of lending are typically simple debt structures for acquisition or refinance, but they are different in several key ways. In this article, we’ll explore the differences between hard money and private money loans so that you can decide which will work better for your needs. ## The Difference Between a Hard Money Loan and a Private Money Loan One thing to keep in mind is that hard money and private money loans are not the same thing. In fact, they’re actually quite different. Hard money loans are short-term, typically lasting between 3-12 months and can be used for any number of purposes including rehabs, [flips](https://insigniafs.com/fixnflip/), land acquisition or acquisition/construction loans. Private money loans usually have a longer repayment period (1-5 years), but have lower interest rates and fees due to their personal nature. True private money loans are also not as widely available as hard money and traditional bank loans, since private lenders tend to make fewer loans, for longer terms. ## Local Private Money and Hard Money Lenders Local private money lenders can be a great option if you have a relationship or a “local” deal that requires some insight into the market, whereas national hard money lenders are easy to identify, lend across a wide range of properties and markets, and tend to be more comfortable with the risks associated with larger dollar transaction or more complex projects. Local Private Money Lenders If you’re just getting started as a real estate investor, it can be difficult to find people who are willing to lend you their money in the early stages. Most will want to know that you are capable of making the deal work and paying off their loan when the time comes. The good news is that there are plenty of local private investors out there who are seeking to lend their funds and earn a healthy return—and they may even be able to help you grow as an investor in other ways, since most find their way to private lending through their own real estate investing journey. National Hard Money Lenders If none of your friends, family, or acquaintances fit the bill for what we’ve outlined above as ideal candidates for lending their own capital directly, then it might make sense for an investor to contact an [institutional hard money](https://insigniafs.com/hard-money-loans/) or private money lender to determine their lending criteria, which is often asset based and rely almost exclusively on the quality, value, and condition of the property, and intended purpose of the transaction. When you’re looking for a hard money or [private money loan](https://insigniafs.com/private-lender/), you will have the option to choose between local and national private lenders. There are pros and cons to each type of lender. Local private lenders tend to know their market and can work with investors who aren’t necessarily accredited as long as they are able to prove they can repay their loans, whether via successfully refinancing at loan maturity, or exiting the loan via a sale, in the case of a flip or reposition. On the other hand, national private lenders may be able to lend larger amounts of money than local ones, but may have stricter requirements for borrowers or require more collateral or equity in assets. [CRE](https://m.insigniafs.com/cre-finance-insights/tag/cre), [Lending](https://m.insigniafs.com/cre-finance-insights/tag/lending), [loans](https://m.insigniafs.com/cre-finance-insights/tag/loans), [bridge loans](https://m.insigniafs.com/cre-finance-insights/tag/bridge-loans), [fix and flip](https://m.insigniafs.com/cre-finance-insights/tag/fix-and-flip), [commercial real estate](https://m.insigniafs.com/cre-finance-insights/tag/commercial-real-estate) ## Related posts [![](https://m.insigniafs.com/hs-fs/hubfs/Imported_Blog_Media/Capital-Markets-Update-02262024-Facebook-Post-3.png?height=200&name=Capital-Markets-Update-02262024-Facebook-Post-3.png)](https://m.insigniafs.com/cre-finance-insights/how-a-commercial-mortgage-broker-saves-you-time-and-money) [CRE](https://m.insigniafs.com/cre-finance-insights/tag/cre), [Lending](https://m.insigniafs.com/cre-finance-insights/tag/lending), [loans](https://m.insigniafs.com/cre-finance-insights/tag/loans), [CREF](https://m.insigniafs.com/cre-finance-insights/tag/cref), [commercial real estate](https://m.insigniafs.com/cre-finance-insights/tag/commercial-real-estate), [finance](https://m.insigniafs.com/cre-finance-insights/tag/finance) ## [A Commercial Mortgage Broker Saves You Time and Money](https://m.insigniafs.com/cre-finance-insights/how-a-commercial-mortgage-broker-saves-you-time-and-money) [John Morelli](https://m.insigniafs.com/cre-finance-insights/author/john-morelli) May 28, 2024 11:21:32 PM Considering financing a commercial property? You’ve likely considered working with a commercial... [Read more](https://m.insigniafs.com/cre-finance-insights/how-a-commercial-mortgage-broker-saves-you-time-and-money) [![](https://m.insigniafs.com/hs-fs/hubfs/Imported_Blog_Media/awards_missionwalk.jpg?height=200&name=awards_missionwalk.jpg)](https://m.insigniafs.com/cre-finance-insights/incentive-to-refinance-commercial-loans) [CRE](https://m.insigniafs.com/cre-finance-insights/tag/cre), [bridge loans](https://m.insigniafs.com/cre-finance-insights/tag/bridge-loans) ## [Strong Incentive to Refinance Commercial Loans Ahead of Maturity](https://m.insigniafs.com/cre-finance-insights/incentive-to-refinance-commercial-loans) [John Morelli](https://m.insigniafs.com/cre-finance-insights/author/john-morelli) Apr 26, 2022 3:53:53 PM The total cost of capital is now a top-of-mind consideration for real estate owners. Capital... [Read more](https://m.insigniafs.com/cre-finance-insights/incentive-to-refinance-commercial-loans) [![](https://m.insigniafs.com/hs-fs/hubfs/Imported_Blog_Media/B2R1-scaled.jpeg?height=200&name=B2R1-scaled.jpeg)](https://m.insigniafs.com/cre-finance-insights/the-impact-of-rising-interest-rates-on-ltr-and-dscr-loans) [Lending](https://m.insigniafs.com/cre-finance-insights/tag/lending), [DSCR Loans](https://m.insigniafs.com/cre-finance-insights/tag/dscr-loans), [loans](https://m.insigniafs.com/cre-finance-insights/tag/loans), [commercial real estate](https://m.insigniafs.com/cre-finance-insights/tag/commercial-real-estate) ## [The Impact of Rising Interest Rates on DSCR Loans](https://m.insigniafs.com/cre-finance-insights/the-impact-of-rising-interest-rates-on-ltr-and-dscr-loans) [John Morelli](https://m.insigniafs.com/cre-finance-insights/author/john-morelli) Jun 14, 2022 1:34:23 PM It is no secret that when choosing an investment strategy, you need to consider many factors – risk... [Read more](https://m.insigniafs.com/cre-finance-insights/the-impact-of-rising-interest-rates-on-ltr-and-dscr-loans) [facebook-f icon](https://www.facebook.com/GoINSIGNIA) [linkedin-in icon](https://www.linkedin.com/company/insigniafs) [Twitter icon](https://twitter.com/INSIGNIAfs) [instagram icon](https://www.instagram.com/INSIGNIAfs) --- © 2024 INSIGNIA Financial Services, LLC.  All rights reserved. The information provided herein is intended for business users only and is not intended for use by the general public or individual, personal, or household consumers. Programs may be cancelled or modified at any time without prior notice. Programs may not be available in all jurisdictions. These materials are intended to provide general information to the reader. This information is made available with the understanding that INSIGNIA Financial Services, LLC is not engaged in rendering legal, accounting, or other professional services. We use reasonable care in providing information but cannot guarantee accuracy or completeness. Information is provided with no warranty, express or implied, any and all such warranties are expressly disclaimed. We assume no liability for any loss, damage, or expense from errors or omissions in these materials, whether arising in contract, tort, or otherwise. Freddie Mac® and Optigo® are registered trademarks of Freddie Mac. Fannie Mae® is a registered trademark of Fannie Mae. INSIGNIA Financial Services LLC is not affiliated with the Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Freddie Mac or Fannie Mae. We do not conduct business in Alaska, Minnesota, Nevada, North Dakota, South Dakota, Oregon, Utah, and Vermont. ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "John Morelli", "url" : "https://m.insigniafs.com/cre-finance-insights/author/john-morelli" }, "dateModified" : "2024-07-17T02:51:13.286Z", "datePublished" : "2022-11-26T22:51:11.000Z", "headline" : "Private Money Loans vs. Hard Money Loans : INSIGNIA Financial Services", "image" : [ "https://m.insigniafs.com/hubfs/Imported_Blog_Media/eric-brehm-X3a6o6Rs0kw-unsplash-1.jpg" ], "mainEntityOfPage" : { "@id" : "https://m.insigniafs.com/cre-finance-insights/private-money-loans-vs-hard-money-loans", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://m.insigniafs.com/hubfs/INSIGNIA%20Financial%20Services%20Logo%202026.png" }, "name" : "INSIGNIA Financial Services, LLC" } } ```