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Current ratesWhy rates varyPoints and feesRate vs. pointsPrepaymentNet proceedsFive questions to ask before you pick a proposalQuestionsGet a quoteMost borrowers ask one question first: “What’s the rate?”
It’s a fair place to start, but stopping there can cost you. Whether you call it hard money or private money, a real estate loan has a structure as well as a price. The rate doesn’t tell you how much of the loan you can actually use, what you pay before funding, or what happens if your sale or refinance runs late.
This guide covers what hard money loans in California cost, using our own current ranges, and how to compare two proposals so you can see which one is actually cheaper.
What are hard money loan rates in California?
Rates depend on the property type and the lien position. These are Alliance Portfolio’s ranges as of November 2026:
Loans run from $500,000 to $10 million, and most fall between $1 million and $5 million. Terms are one to three years, interest only, and most are written for 18 to 24 months. We close in 5 to 10 days, about 10 on average.
Where a loan lands in its range comes down to the property, the equity under the loan and how it gets repaid. Points are set per transaction, so ask for them in writing alongside the rate.
Why two hard money loans can be priced differently
A lender prices the specific property and the specific request. Two borrowers asking for the same amount can be asking for very different loans.
A finished investment property with plenty of equity and a believable refinance plan is one kind of loan. An unfinished project that only gets repaid once the work is done and a buyer shows up is another. Lien position matters too: a lender behind existing debt has to understand that senior loan, how much equity is left, and how it would get repaid if the deal goes wrong. That’s why second trust deeds price higher and allow less leverage.
Market conditions and how much capital the lender has available can move pricing as well.
What are points and fees on a hard money loan?
Interest is what you pay over time to borrow. Points and other upfront charges are separate, and you should compare them separately.
A point is generally one percent of the loan amount, so two points on a $2,000,000 loan is $40,000. An origination charge can be quoted in points or as a dollar amount. Ask what it covers and how it’s calculated. Paying more points doesn’t automatically buy you a lower rate.
Depending on the deal, you may also pay for valuation, title, escrow, recording, legal or document preparation, and an agreed broker fee if a broker is involved. For each charge, find out who receives it and whether it’s paid before closing, at closing, or taken out of the proceeds. Lenders don’t all use the same labels, and an early quote may leave some costs out.
Which is cheaper: a lower rate or fewer points?
It depends on how long you keep the loan. Here’s a hypothetical $2,000,000 interest-only loan quoted two ways:
- Upfront: $40,000
- Interest: $18,333 a month
- Repaid at 6 months: $150,000 total
- Repaid at 18 months: $370,000 total
- Upfront: $20,000
- Interest: $20,000 a month
- Repaid at 6 months: $140,000 total
- Repaid at 18 months: $380,000 total
Repay in six months and the higher rate is $10,000 cheaper. Keep the loan 18 months and it’s $10,000 more expensive. The two cross at 12 months, when the $20,000 saved on points has been used up by the extra $1,667 a month in interest.
So ask each lender to estimate your total cost at your expected payoff date and again at a later one, using the same assumptions. The later date matters most for bridge loans. A refinance, a sale or a finished project can be a perfectly good exit and still not arrive on schedule.
Do hard money loans have prepayment penalties?
Some do. Planning to repay early doesn’t decide what early repayment costs. The loan documents do.
Ask whether the proposal has a minimum-interest requirement, a prepayment charge, an exit fee or any other payoff terms. Not every loan has them, and what they cost depends on the agreement. Ask what happens if you repay late, too. Don’t count on an extension. If one is available, find out the conditions, the cost and who approves it.
Put it to the lender this way: “What would I owe if I repay on this date, and what changes if I repay later?”
How much of the loan will you actually get?
The loan amount at the top of a proposal isn’t always the cash you get to use. Existing debt may have to be paid off first. Charges may be deducted. Some money may be held back for interest reserves or construction draws.
For a borrower buying or refinancing in California, that decides how much extra cash you need to bring. For a broker, it can decide whether a proposal actually solves your client’s problem. Ask for a breakdown: gross loan amount, deductions, reserves, any staged funding, and estimated net proceeds.
Five questions to ask before you pick a proposal
- What will the financing cost in total through my planned payoff date?
- Which charges are included, and which are still estimates or depend on third parties?
- How much usable cash will I have at closing?
- What changes if I repay earlier or later than planned?
- What conditions still have to be met before the lender can fund?
Put those answers next to the interest rate, and keep preliminary terms separate from a commitment that still depends on underwriting and closing conditions.
Hard money loan questions
How much can I borrow with a hard money loan?
With Alliance Portfolio, $500,000 to $10 million, and most loans fall between $1 million and $5 million. Maximum loan-to-value is 65% on a residential first trust deed and lower for second position and commercial property.
How fast can a hard money loan close?
We close in 5 to 10 days, about 10 on average. The property, the title and the paperwork set the pace.
How long are hard money loan terms?
One to three years, interest only. Most of our loans are written for 18 to 24 months, set around how the loan will be repaid.
Do you need good credit for a hard money loan?
We don’t set debt-to-income or credit score requirements. The decision rests on the property, the equity and the exit. LLCs, trusts and corporations can borrow.
Can I use a hard money loan on my own home?
No. Our loans are business-purpose only. We don’t make consumer loans on a home the owner lives in.
Start with the transaction
Alliance Portfolio is a direct hard money lender in coastal California, with loans across Orange County, coastal Los Angeles, San Diego County and the San Francisco Bay Area. Our lending team looks at the property, the equity, the structure, the timing and the repayment plan before telling you whether there’s a path forward.
If you have a scenario, send us the property location, estimated value, existing debt, requested loan amount, purpose, timing and how you plan to repay. What to send a private lender explains each one, and our loan programs show how we usually structure them.
