1. What is a Hard Money Unsecured Loan?

A hard money unsecured loan is a type of short-term financing not backed by collateral. These loans typically have higher interest rates than traditional secured loans and are often used by real estate investors or borrowers who need quick funding but may not qualify for conventional loans.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: This formula calculates the fixed monthly payment required to fully amortize (pay off) the loan over its term, including both principal and interest.

3. Understanding Loan Payments

Details: Each payment consists of both principal and interest. Early in the loan term, a larger portion goes toward interest. As the loan matures, more of each payment is applied to the principal.

4. Using the Calculator

Tips: Enter the loan amount in dollars, annual interest rate as a percentage (e.g., 12 for 12%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's typical for hard money loan terms?
A: Hard money loans often have terms of 6-24 months with interest rates between 8-15%, though terms vary by lender.

Q2: Why are hard money rates higher?
A: These loans carry more risk for lenders since they're unsecured and often made to borrowers who don't qualify for traditional financing.

Q3: Can I pay off early?
A: Most hard money loans allow early payoff, but check for prepayment penalties which are common.

Q4: What's the difference between secured and unsecured?
A: Secured loans require collateral (like property), while unsecured loans don't but have stricter terms.

Q5: Who typically uses these loans?
A: Real estate investors, house flippers, or borrowers needing quick financing for time-sensitive opportunities.