Hard money loans are short-term instruments — not long-term mortgages. The loan term defines how long you have before the full balance (principal plus any accrued interest) is due.

Typical Loan Terms

• 6 months — common for fix and flip loans on fast-turnaround projects
• 12 months — the most common term for acquisition and renovation projects
• 18–24 months — for larger or more complex projects, or bridge situations requiring more time
• 36 months — available from some lenders for longer-term bridge or stabilization scenarios

Interest-Only vs. Amortizing

Most hard money loans are structured as interest-only during the loan term, with the full principal due at maturity (a balloon payment). This keeps monthly payments lower during the project period, with the loan repaid in full from the sale proceeds or a refinance at payoff.

Extension Options

If your project takes longer than expected, many hard money lenders offer extension options — typically at an additional fee (0.5%–2% of the loan amount per extension period) and sometimes at a higher rate. Build the possibility of an extension into your project budget as a contingency.

Exit Strategy

Because hard money is short-term, every hard money loan should have a clear exit strategy: either a property sale or a refinance into longer-term financing. Lenders will ask about your exit strategy as part of the loan approval process.