If you’re an investor – or anyone else – who’s thinking about borrowing from a hard money lender, you’re probably wondering if you have to have good credit to get a hard money loan.

Here’s what you need to know.

Do You Have to Have Good Credit to Get a Hard Money Loan?

Hard money loans are for people who want fast approval on a house’s after-repaired value, or ARV.

And you might be surprised to learn that you don’t have to have stellar credit to get a hard money loan.

The bottom line is that hard money lenders are able to focus on more than just your credit score to qualify you for a loan. In fact, in many cases, the house’s appraisal document is more important than your credit report is when it comes to qualification.

That’s because hard money lenders are asset-based lenders. The house you’re purchasing with the hard money loan is used as collateral on the loan, so the loan is secured – and that gives lenders more assurance that you’ll make your payments, which makes them more comfortable lending you money than they would be if they judged you on your credit score alone.

When you borrow from a hard money lender, you’re borrowing against the property. You’re also getting a shorter-term loan than you would with a conventional bank, and you’re going to be able to borrow on the amount that the property will be worth after you’ve repaired and improved it. Funding is a lot faster, too, which means that if you’re an investor, a hard money loan may be the right solution for you.

Do You Need a Hard Money Loan?

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