Fastest Hard Money Loan Calculator

Loan Payment Formula:

\[ M = \frac{P \times r \times (1+r)^n}{(1+r)^n - 1} \]

Monthly Payment (M):

Total Payment:

Total Interest:

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1. What is a Hard Money Loan?

A hard money loan is a type of short-term loan secured by real property, typically used by real estate investors. These loans have higher interest rates than conventional loans but are easier to obtain and fund faster.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

\[ M = \frac{P \times r \times (1+r)^n}{(1+r)^n - 1} \]

Where:

\( M \) — Monthly payment
\( P \) — Principal loan amount
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Number of payments (loan term in months)

Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over its term.

3. Understanding Loan Payments

Details: Each payment consists of both principal and interest. Early in the loan, most of the payment goes toward interest. As the loan matures, more goes toward principal.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate, and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are typical hard money loan terms?
A: Terms usually range from 6-24 months with interest rates between 8-15%.

Q2: How accurate is this calculator?
A: It provides accurate estimates for fixed-rate loans but doesn't account for fees or variable rates.

Q3: What's the difference between interest rate and APR?
A: APR includes fees and other loan costs, while the interest rate is just the cost of borrowing principal.

Q4: Can I pay off a hard money loan early?
A: Most allow early payoff but may charge prepayment penalties - check your loan terms.

Q5: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid.