Both lend on the property instead of your income, but hard money usually means short-term, higher-cost loans from individuals or small funds, often 10% to 15% interest and 2 to 4 points. Institutional private lenders tend to offer lower rates, more leverage and longer-term options. At Clion Capital, fix-and-flip rates start at 9.00%.
How Do They Compare?
| Typical hard money lender | Institutional private lender (Clion Capital) | |
|---|---|---|
| Capital source | Individuals or small funds | Institutional capital |
| Rates | Often 10% to 15% | From 9.00% fix-and-flip, 9.25% new construction, 7.00% rental |
| Points | Often 2 to 4 | Origination from 1.00%, $999 underwriting fee |
| Leverage | Often 65% to 75% of value | Up to 92.5% of cost, 90% of ARV |
| Rehab funding | Sometimes partial | 100% of rehab in draws |
| Products | Short-term only | Fix-and-flip, bridge, construction, DSCR rental |
These are typical market ranges, and individual lenders vary. Read the term sheet, not the label.
What Do They Have in Common?
Both are asset-based. Both make business-purpose loans, which Regulation Z exempts from consumer ability-to-repay rules (consumerfinance.gov). Both can close far faster than a bank and lend on properties that need work.
Which One Is Cheaper on a Real Deal?
Take a $286,750 six-month flip loan. At 12% with 3 points, interest is about $17,200 and points about $8,600: $25,800 total. At 10% with 1.5 points plus a $999 fee, interest is about $14,300 and fees about $5,300: $19,600 total.
That $6,200 difference is about 10% of the typical gross flip profit of $60,526 in Q2 2026 (attomdata.com). Points matter. So do the months you hold.
When Does Each Make Sense?
- Hard money: a one-off deal, an unusual property, or when you already have a relationship with a local lender.
- Institutional private lender: repeat flips, higher leverage, construction, or a plan to refinance into a rental loan with the same lender.
Tighter bank credit pushes more investors to private capital. Builders reported the eighteenth straight quarter of tighter construction credit in NAHB’s Q2 2026 survey (eyeonhousing.org).
How Do You Choose?
Compare total cost over your real hold period, draw speed, extension terms and whether the lender funds its own loans. Use our guide to comparing private lenders, avoid the common mistakes, and read what asset-based lending is. Then get your rate at apply.clioncapital.com.
Frequently Asked Questions
Is a private lender the same as a hard money lender?
Not exactly. Both lend on the property, but hard money usually refers to short-term, higher-cost loans from individuals or small funds. Institutional private lenders often offer lower rates, more leverage and more loan types.
What are typical hard money rates?
Often 10% to 15% interest with 2 to 4 points, though terms vary by lender and deal.
What are Clion Capital’s rates?
Fix-and-flip from 9.00%, new construction from 9.25% and rental loans from 7.00%, with origination from 1.00% and a $999 underwriting fee.
Do private lenders fund rehab costs?
Many do. Clion Capital funds 100% of the rehab budget, released in draws as work is completed.
Can I refinance a hard money loan into a rental loan?
Yes. Once the property is repaired and rented, you can refinance into a DSCR loan. Using one lender for both steps makes it simpler.
Last updated October 27, 2026.
Sources and References
- CFPB: Regulation Z §1026.3, Exempt Transactions
- ATTOM: Q2 2026 U.S. Home Flipping Report
- NAHB Eye on Housing: Cost of Credit for Builders Up Since the End of 2025 (AD&C Survey, Q2 2026)
- Clion Capital: loan programs and rates
About the Author
Clion Capital is a direct private lender for professional real estate investors, offering fix-and-flip, bridge, new construction and DSCR rental loans. Our principals work directly with every borrower, and 70% of our business comes from repeat clients. See your rate instantly at apply.clioncapital.com or learn more about Clion Capital.