Hard Money vs. Conventional Loans
Hard money and conventional loans serve fundamentally different purposes. Understanding when to use each can save you money and headaches.
| Feature | Hard Money Loans | Conventional Loans |
|---|---|---|
| Approval Speed | As fast as 24 hours | 3–6 weeks typical |
| Interest Rates | 10–14% | 6–8% depending on credit |
| Loan Term | 12–24 months | 15 or 30 years |
| Credit Requirements | None or minimal | 620+ minimum, 740+ for best rates |
| Income Verification | Usually not required | Full documentation required |
| Down Payment | 25–40% | 3–20% |
| Property Condition | Any condition acceptable | Must meet appraisal standards |
| Primary Qualification | Property value (LTV) | Borrower credit, income, DTI |
| Best For | Short-term investment, fix-and-flip, bridge | Long-term primary residence or rental hold |
Best For: Hard Money Loans
Real estate investors who need fast funding, are buying properties that need renovation, or have credit challenges. Ideal for fix-and-flip, bridge situations, and auction purchases.
Learn More About Hard Money Loans →Best For: Conventional Loans
Homebuyers and long-term investors who have time to go through underwriting and want the lowest possible long-term rate.
Learn More About Conventional Loans →The Bottom Line
These aren't competing products — they serve different stages of the real estate cycle. Many California investors use hard money to acquire and renovate, then refinance into a conventional or DSCR loan for the long-term hold. Our recommended broker offers both under one roof.
Not Sure Which Is Right for You?
Save Financial runs side-by-side comparisons for every client — showing you the exact dollar difference between programs for your specific situation. No guessing, just math. Call (888) 703-1840 or get a free quote online.
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Expert Contributor
Mike Baasti, Licensed Mortgage Broker
Expert contributor to Mortgage Guide California. Licensed mortgage broker (Sponsored by Save Financial, Inc. (NMLS #377740), DRE #01875766) and founder of Save Financial, Inc. in Newport Beach, CA. 20+ years originating conventional, FHA, VA, jumbo, and specialty loans across California.
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Last updated: July 2026. Sources: FHFA, HUD, VA, CalHFA, CFPB, California DRE, California Association of Realtors. All loans subject to credit approval. Rates subject to change.