Hard Money Loans Calculator

Our hard money loan calculator can help you quickly estimate your monthly payments and total loan cost. With this easy-to-use tool, you can make informed decisions about your investment.

Hard money loans are a form of short-term financing that is based on the value of a property. Unlike traditional loans, hard money loans typically have higher interest rates and shorter terms. However, they also offer greater flexibility and can be approved more quickly.

What types of projects are hard money loans used for?

Hard money loans are a great option for:

• Property rehabilitation: When you need to finance the purchase and repair of a distressed property to then sell or rent it.
• New property construction: To finance the construction of homes or commercial buildings.
• Short-term investment projects: When you need capital quickly to take advantage of a real estate investment opportunity.

Why are they an option for investors?

• Speed and flexibility: Hard money loans are approved more quickly and offer more flexible terms than traditional loans.
• Access to capital: Even if you have a limited credit history or if the project is considered high risk, you can obtain financing through a hard money loan.
• Greater control: Hard money loans typically have fewer restrictions and allow you to have greater control over the project.

In summary, hard money loans are a valuable financial tool for real estate investors seeking capital quickly for short-term projects. However, it is important to note that interest rates are higher and terms are shorter than traditional loans.

Our calculator is designed to provide you with a quick estimate of your monthly payments and total loan cost. To use the calculator, simply input the following information:

• Loan Amount: The total amount of money you’re borrowing. For example, if you need $10,000 for your project, you would enter “10,000”.
• Loan Term: The duration of the loan in months. If you want to repay the loan in 10 months, you would enter “10”.
• Interest Rate: The annual percentage rate (APR) you’ll be charged. For example, if the rate is 10% per year, you would enter “10”.
• Amortization Period: The total duration of the loan in years. In our example, if the loan term is 10 months, the amortization period would be 1 year (as 10 months is approximately 1 year).

Once you’ve inputted these details and clicked “Calculate,” you’ll receive the following information:

• Principal & Interest Monthly Payment: This is the total amount you’ll need to pay each month to cover both the principal (the amount you borrowed) and the interest accrued on the loan.
• Interest-Only Monthly Payment: If you choose this option, your monthly payments will be lower as you’ll only be paying the interest on the loan. However, at the end of the loan term, you’ll need to make a lump sum payment (the balloon payment) to pay off the remaining principal.
• Balloon Payment: This is the total amount you’ll need to pay at the end of the loan term if you’ve selected the interest-only payment option.
• Amortization Schedule: This table breaks down each payment into principal and interest portions and shows you how the loan balance decreases over time.

Example:

If you input the following data into the calculator:

• Loan Amount: $10,000
• Loan Term: 10 months
• Interest Rate: 10% per year
• Amortization Period: 1 year

The calculator might provide the following results:

• Principal & Interest Monthly Payment: $879.16
• Interest-Only Monthly Payment: $83.33
• Balloon Payment: $10,000

What do these results mean?

• If you choose to pay both principal and interest, you’ll pay $879.16 each month for 10 months to fully repay the loan.
• If you choose to pay only interest, your monthly payments will be $83.33 for 10 months, but at the end of the term, you’ll need to make a one-time payment of $10,000.

The amortization schedule will show you in detail how each payment is applied and how the loan balance decreases over time.

Why use this calculator?

• Understand costs: It allows you to visualize the total cost of the loan and compare different payment options.
• Plan your payments: It helps you determine if the monthly payments fit into your budget.
• Make informed decisions: It provides you with the necessary information to choose the financing option that best suits your needs and goals.