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Private Money Loan Calculator

Private money loans come from individual investors — often family, friends, or real estate-focused networks. Rates 8-13%, flexible terms. This calculator structures a fair deal and computes borrower cost and lender yield.

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Total cost to borrower

$24,000

Monthly payment

$1,250

Total interest

$22,500

Points cost

$1,500

Effective annual yield to lender

10.67%

How the math works

$150K at 10% IO for 18 months with 1 point: $1,250/mo interest + $1,500 points = $23,250 borrower cost. Lender yield 10.7%.

Private money is great when you have a track record. Lenders want collateral, experience, and trust. Treat every deal professionally — 1 bad deal ends the relationship.

How to Use

  1. Enter loan amount, rate, term, and any points.
  2. See monthly payment, total cost to borrower, and yield to lender.

Frequently Asked Questions

Private vs hard money?

Private money: individual lender, relationship-based, flexible. Hard money: professional lender, institution, standardized process. Private usually cheaper (8-12% vs 10-14% hard money) but requires network.

Secured by property?

Should be. Mortgage or deed of trust on the property protects the lender. Unsecured private loans are high-risk for lender. Record the lien.

How structured?

Promissory note + mortgage/deed of trust. Interest-only or amortizing. Balloon typical (12-36 months). Title insurance for lender. RE attorney for both sides.

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