Bridge Loans vs DSCR Loans: When to Use Hard Money
Real estate investors have more funding options than ever, but the choice between a Bridge Loan and a DSCR Loan can be confusing. Both serve unique purposes, and knowing which to use can make or break your deal.
↳ Bridge Loans
Best for short-term needs, bridge loans provide fast capital to secure a property, cover rehab, or buy time until permanent financing is available. Think of it as a sprint: higher interest, but immediate funding.
↳ DSCR Loans
A DSCR (Debt Service Coverage Ratio) loan is designed for long-term rentals. Lenders qualify the loan based on property cash flow instead of your personal income. It’s a marathon: slower to close, but cheaper and sustainable over time.
When to use Hard Money
Bridge loans are where hard money shines. Traditional banks can’t close in days, but Prosper Financial Solutions, LLC can. Investors turn to hard money when speed, certainty, and flexibility matter more than rate. Whether you’re flipping, repositioning, or racing against a contract deadline, hard money keeps you in the game.
Prosper borrower tip: Use a bridge loan to acquire and stabilize, then refinance into a DSCR loan for lower long-term costs.
Related reading:
Fast Hard Money Loans for Real Estate Investors in 2025
Hard Money Loan Requirements: How to Close Fast
