- Hard money and bridge loans are both short-term, interest-only loans sized on the property and the exit. Hard money usually means a rehab loan sized on after-repair value; bridge usually means a loan on a property that's rent-ready or close to it.
- Private money describes the lender, an individual or small group lending its own funds, not the loan's structure. Terms are negotiated and there's no public rate data.
- On 2025 HMDA data, short-term investor loans had a median rate of 10%: 10.45% at non-bank lenders and 7.5% at banks. Advertised non-bank floors in October 2026 ran 7.75–9.24% for fix-and-flip and 8.25–8.49% for bridge.
- On a $300,000 loan held 9 months, each point costs $3,000, or 1.33 percentage points of annualized cost. Compare total dollars, not the rate.
Hard money vs bridge loan is mostly a question of what the loan is for. Both are short-term, interest-only loans that lenders size on the property and your exit rather than your income. “Hard money” usually means a rehab loan sized on after-repair value (ARV), with the renovation funded through draws. “Bridge” usually means a loan on a property that needs little or no work, held until you sell or refinance. “Private money” cuts across both: it describes who is lending, an individual rather than a lending company. One loan can wear all three labels.
Three labels for one overlapping market
Hard money: asset-based loans for property that needs work
Hard money lenders are non-bank companies and funds that lend on the property's value and the exit plan. Most national fix-and-flip programs are hard money in all but name. In October 2026 they published 85–100% of the purchase price, 100% of the rehab released in draws, a loan cap of 70–80% of ARV, and terms of 6–24 months, interest-only. Published minimum credit scores ran 600–660.
Bridge loans: time between two transactions
A bridge loan covers the gap between buying or owning a property and the next step: a sale, a lease-up or a long-term DSCR refinance (a rental loan qualified on the debt service coverage ratio: rent divided by the monthly payment). Published 1–4 unit bridge programs ran 70–85% LTV, up to 85% of cost, 12–24 month terms and 660–700 minimum scores in October 2026. Roc's Stabilized Bridge wants a property in C2 condition or better, and Lima One says its Bridge Plus isn't designed for properties that need rehab. Kiavi and LendingOne also use “bridge” for rehab loans, which is where the terms blur.
Private money vs hard money: a person, not a product
Private money is a loan from an individual or small group lending its own funds: a business contact, a past partner, a relative, a local investor. Everything is negotiated, from rate and points to term, leverage and lien position. An individual making a few loans a year falls below the federal HMDA reporting threshold, which leaves out lenders with fewer than 25 closed-end loans in either of the two prior years, so there's no public rate data for private money.
Hard money vs bridge vs private money, side by side
| Feature | Hard money | Bridge loan | Private money |
|---|---|---|---|
| Who lends | Non-bank lending companies and funds | Non-bank lenders and some banks | Individuals or small groups lending their own money |
| Typical use | Buy and renovate: flips, the rehab phase of a BRRRR | Buy or refinance a rent-ready or lightly renovated property before a sale or DSCR refinance | Whatever both sides agree: fast closes, gap funding, deals institutions decline |
| Term | 6–24 months, interest-only | 12–24 months; banks go to 36 months more often | Negotiated |
| Leverage | 85–100% of purchase and 100% of rehab, capped at 70–80% of ARV | 70–85% LTV; up to 85% of cost | Negotiated |
| Rate | 2025 non-bank median 10.45% (middle half 9.75–11%); advertised floors 7.75–9.24% | Advertised non-bank floors 8.25–8.49%; 2025 bank median 7.5% on short-term investor loans | No public data; whatever the note says, within state usury limits |
| Points and fees | 0–2 points plus fees such as a $1,995 doc fee | Points vary; processing and third-party fees | Negotiated |
| Speed | About 1–3 weeks; as few as 7 days at Kiavi | 7–14 business days | As fast as title, escrow and the lender's attorney |
| Qualifies on | The deal, the ARV and your experience; 600–660 minimum FICO | Value, condition and exit; 660–700 minimum FICO | The relationship and the collateral |
| Regulation | Business-purpose credit is outside Regulation Z; state licensing varies | Same; banks are also supervised by their regulators | Same federal treatment; state licensing and usury rules can still apply |
Swipe the table to see every column →
Regulation is the least understood row. Regulation Z, which implements the Truth in Lending Act, exempts credit made primarily for a business purpose, and the CFPB's official commentary deems credit to buy, improve or maintain a rental property that isn't owner-occupied to be business purpose. That's why these loans close without consumer mortgage disclosures. It doesn't make them unregulated. State law decides whether a non-bank lender needs a license, and California's Financing Law, for example, covers commercial loans as well as consumer ones. Usury limits also vary by state, so ask a real estate attorney how they apply to your deal.
Match the loan to the property's condition and your exit
Hard money when the house needs work
If the value is in the renovation, you want a lender that sizes the loan on ARV and funds the rehab through draws. That's a fix-and-flip or rehab loan, whatever the lender calls it. Ask how interest accrues: the larger the holdback, the more you save by paying interest only on drawn funds rather than the full loan.
A bridge loan when the property is close to ready
If the house is rent-ready or needs light work, a bridge loan buys time to lease it and refinance into a DSCR loan, to sell it, or to close fast before permanent financing is in place. Lima One and Kiavi published no prepayment penalty on their bridge loans, which matters when the plan is a quick refinance. Size the term around that refinance: DSCR lenders published about 90 days of seasoning before lending on a higher appraised value, and some waive it when they made the short-term loan themselves. If you bank locally, ask about a bank short-term loan; the 2025 bank median was 7.5%, though banks made only about 15% of these loans.
Private money when speed or fit beats price
A private lender can close on property the programs won't touch. New Silver, for example, excludes rural property, and Roc's bridge program excludes rural and unique homes. Private money can also fund part of a down payment behind a first-lien loan, but confirm your first-lien lender allows a second lien before you sign one. Paper every private loan like an institutional one: a written note, a recorded mortgage or deed of trust, title insurance and a closing agent.
Often, the answer is two of them in sequence
A BRRRR uses a short-term loan to buy and renovate, then a DSCR loan to refinance; LendingOne published refinancing up to 75% of ARV on its fix-to-rent program in October 2026. A flip might close on private money in days and move to a rehab loan once a lender's valuation is done; Kiavi, for one, offers a delayed purchase refinance within 6 months of purchase. Plan both loans before you sign the first, because the second one's leverage and seasoning rules decide whether the first one can be paid off on time.
What a 9-month hold costs: rate and points together
Take a $300,000 interest-only loan on a stabilized property, held 9 months, with no draws. To isolate the rate, give each institutional option the same 1 point and a $1,995 lender fee. Rates are the 2025 HMDA bank median, an October 2026 advertised floor and an assumed 10.25% for hard money, just under the 2025 non-bank median of 10.45%.
| Feature | Bank short-term loan | Non-bank bridge | Hard money |
|---|---|---|---|
| Rate basis | 2025 bank median | Advertised floor (Kiavi, Roc) | Assumed (2025 non-bank median: 10.45%) |
| Rate | 7.5% | 8.25% | 10.25% |
| Interest, 9 months | $16,875 | $18,563 | $23,063 |
| 1 point | $3,000 | $3,000 | $3,000 |
| Lender fee | $1,995 | $1,995 | $1,995 |
| Total cost | $21,870 | $23,558 | $28,058 |
| Annualized cost | 9.72% | 10.47% | 12.47% |
Swipe the table to see every column →
Three things stand out. Each point on a $300,000 loan is $3,000, which adds 1.33 percentage points of annualized cost over 9 months, and 2 points over 6. The 2.75-point gap between the bank and hard money columns is worth $6,188 here, more than two points. And a private loan only beats the hard money column if its total cost stays under $28,058: that's 12.47% with no points or fees, or 9.80% with 2 points.
The cheapest column isn't always on offer. Banks made about 15% of 2025 short-term investor loans, and advertised floors go to the strongest files. Put your own quotes into the same table, and add extension fees if the hold could run past the term.
Time costs more than rate
If the 9-month plan runs to 14 months, the hard money loan above costs another $12,813 in interest for the extra 5 months, before any extension fee, and on a 12-month term you'd need an extension or a new loan to get there. That's about twice the $6,188 rate gap between the bank and hard money options over the whole planned hold. Pick the term for the plan you'd have if things go wrong, and get the extension terms on the term sheet: length, fee and whether the rate steps up.
Red flags with any short-term lender
- Fees before a term sheet. The FTC warns that demanding payment before a loan is granted is a hallmark of advance-fee scams. Third-party costs such as an appraisal are normal; a fee to “guarantee” approval is not.
- A promise of approval before anyone has looked at the property or your exit. Real lenders underwrite the deal.
- A rate with nothing attached. Get points, doc and processing fees, draw fees, extension fees, exit fees and the interest method in writing. Kiavi advertising no exit points on its bridge loans tells you some lenders charge them.
- A business-purpose loan on a home you'll live in. The CFPB's rental-property rule doesn't apply if the owner expects to occupy the property for more than 14 days in the coming year. If you're moving in, you need a residential mortgage.
- Changed wiring instructions. Confirm any change by phone, on a number you already had, before you send money.
- A private loan with no paper. Without a recorded lien, a title policy and a closing agent, both sides are exposed.
- A term shorter than the plan. A 12-month loan on a 12-month project leaves no slack; know the extension terms before you sign.
Every loan type in this guide is a business-purpose loan for investment property that neither you nor your family will live in.