Hard money loans and bridge loans are both short-term, asset-based financing, and many lenders use the terms interchangeably. The practical difference: hard money usually means smaller, faster, more expensive loans from private individuals or small funds, often for fix and flip. Bridge loans usually mean larger loans for commercial or income property with a planned refinance into permanent debt.
Key takeaways
- Hard money: about 6 to 24 months, roughly 9% to 13%, 2 to 4 points, 60% to 75% LTV, closes in days.
- Bridge: about 12 to 36 months, roughly 8% to 12%, 1 to 3 points, 65% to 75% LTV (higher loan-to-cost on value-add), closes in 2 to 4 weeks.
- Pick hard money for speed on smaller or rougher deals. Pick bridge for income property with a clear takeout.
- Compare total cost over your full hold period, not the rate alone.
Side-by-Side Comparison
| Hard money loan | Bridge loan | |
|---|---|---|
| Typical lender | Private individuals, small funds | Private funds, debt funds, some banks |
| Loan size | $50,000 to $5 million | $250,000 to $50 million+ |
| Term | 6 to 24 months | 12 to 36 months plus extensions |
| Rate | About 9% to 13% | About 8% to 12% |
| Points | 2 to 4 | 1 to 3 |
| Leverage | 60% to 75% of value, or 65% to 75% of after-repair value on flips | 65% to 75% of as-is; up to 80% to 90% of cost on some value-add |
| Speed | 5 to 14 days | 14 to 30 days |
| Underwriting | Asset value first | Asset value, business plan and exit |
| Common use | Fix and flip, distressed property, fast purchases | Value-add commercial, lease-up, maturing loans |
When Hard Money Is the Better Fit
- You need to close in under two weeks.
- The property is distressed or uninsurable in its current condition.
- It is a fix and flip you will sell within a year. Model it with our fix and flip calculator.
- Credit or documentation issues rule out other lenders.
When a Bridge Loan Is the Better Fit
- The property produces income or will after renovation or lease-up.
- You plan to refinance into a DSCR, bank, agency or CMBS loan.
- The loan is larger than most hard money lenders handle.
- You want lower points, longer terms and extension options.
Compare Total Cost, Not the Rate
Example: $600,000 for 12 months. Hard money at 11.5% and 3 points costs $69,000 interest + $18,000 points = $87,000. A bridge loan at 10% and 1.5 points costs $60,000 + $9,000 = $69,000. If the bridge takes two extra weeks and you lose the deal, the cheaper loan was more expensive. If you have time, the bridge saves $18,000.
Residential Investor Options
For 1 to 4 unit investors, many lenders now offer “fix and flip bridge” and rental bridge products that sit between the two. See no-doc DSCR and fix and flip bridge loans and the fix and flip funding playbook.
Frequently Asked Questions
Is a hard money loan the same as a bridge loan?
They overlap. Both are short-term, asset-based loans. Hard money usually refers to smaller, faster, more expensive private loans; bridge loans are usually larger loans for income property with a planned refinance.
Which is cheaper, hard money or a bridge loan?
Bridge loans are usually cheaper on rate and points. Hard money can be worth the extra cost when speed or property condition rules out other lenders.
Can I refinance a hard money loan into a bridge loan?
Yes. Investors often move from hard money to a bridge loan when a property is renovated but not yet stabilized, then refinance into permanent debt.
Have a deal in mind? Not sure which fits your deal? Tell us about the deal and we will match it with the lenders that fit.