The Ups and Downs Of Hard Money Loans
By Charles Hopkins
Published 09/20/2007 | Finance
Has it ever occurred to you having to pay for something and having to
put your hand in your pocket or opened your wallet only to discover
that you didn't have enough cash to pay? It doesn't usually happen, but
there have been definitely times when you had to turn to somebody else
to ask for a modest money loan. Maybe you've been in real trouble and
needed to borrow two hundred maybe three hundred bucks or more. Hard
money loans or cash loans are straightforward. They are a quick barter
between two friends or a relative, but they can be hard to settle and
could cause clash or disconcert.
The first thing to consider is that running short on money could
occur to anyone. It doesn't have to mean that you are not capable of
taking care of your financial affairs. Sometimes you get in the middle
of situations where debts exceed what you have in your wallet or even
in the bank, so hard money loans come in handy and are the only way to
straighten out the hitch. If you don't have a credit card, line of
credit or the sum of money needed in cash is too small to borrow from a
bank loan, hard money loans are options you'll have to consider.
Trying to avoid disagreements when borrowing money from someone
else is fundamental.These sorts of loans are typically settled by joint
agreement and there's no written contract to outline the rules or the
conditions of borrowing. You might occasionally find new information
and fresh insight on the net about these types of loans.
A good question to ask is: what happens if the debt cannot be paid
back when expected? If you happen to be the vendor, make sure the
amount of money to loan is OK to loose in case the borrower fails to
pay back the sum. If on the other hand you would like to lend the money
but don't trust the borrower, you could organize a written agreement
just in case you have to go to a small claims court to reclaim your
money.Involving the legal system, even for small amounts of cash, is
appropriate, but keep in mind that good relations between borrower and
lender won't usually hold up under the pressures of justice.
If you're the borrower, be on clear terms with your lender if you
have feelings that you are not going to be able to pay back the loan,
or be realistic about the time you need for gathering the money
together and repaying the whole sum. There is nothing wrong about
working out a payment plan and repaying at least a tiny bit of what you
owe each month. This will go a long way to maintaining good
relationships with your lender.
One final thought, when you really can't make your payment, advise
your lender straight away and make sure that hold your word and pay the
second time around. While hard money loans seem to be less serious than
loans from banks, they're still loans and ought to have as much respect
as you can give them and so does the borrower.