A low doc home loan offers an alternative to those who won’t qualify for a traditional bank loan. Instead of the endless income verification and documentation checks borrowers go through, low documentation loan lenders will use other methods. It can be ideal for those who don’t have the type of documentation banks are after. So, what should you know about low documentation loans?
Why Do People Use Low Doc Loans?
Low documentation loans have become a popular option for freelancers, contractors, and those self-employed. When you work in these professions, you might not have a traditional salary, or the documentation required to obtain a mortgage or car loan. As the number of small business owners increases, the need for viable financial solutions becomes greater. Low documentation loans can be a great option to consider because it requires less paperwork. To find out more, check out www.lowdocloansco.com.au.
The Alternative Process
PAYE or PAYG payslips won’t be available if you’re a contractor or self-employed. Low documentation loans, however, don’t require them. You can use other documents, such as business activity statements as a way to verify your income. It’s the same with personal and business bank statements that cover the last six-to-twelve months. These can give a good indication of your income levels and ability to repay a loan. That is why a low doc home loan has become so popular in recent years.
How Quickly Can a Loan Application Be Approved?
The loan process can vary considerably. It partly depends on the type of low doc loan you’re trying to obtain. Low doc loans can also depend on the lender. Sometimes, it can be a matter of hours, but it could also be days. You can’t put a number on this because every lender has a different process to go through. So, patience is key when it comes to approval times. Click here to read morea about Full Doc Vs Alt Doc Vs Low Doc – What’s the Difference?
What about Interest Rates?
Typically, interest rates with a low documentation personal loan can be slightly higher than a traditional bank loan. However, this depends on your credit history, credit score, and the amount you wish to borrow. When you want a low doc home loan, it could be possible to keep your interest rates at a more reasonable level. It will be better when you put down a sizeable deposit (as it lowers interest rates).
Approval is Not Guaranteed
People often assume a low or no doc home loan is easy to obtain, but that doesn’t guarantee your approval. For instance, you have a new small business. You don’t have a good credit history and taking on a loan would stretch your finances to their limits. This probably wouldn’t be a smart time for you to get a loan. On the other hand, if you had the money to repay the loan each month, it can be useful. Low doc loans can be great for most small business owners and self-employed individuals.
Get a Good Loan
Loans are something most people need every so often, whether it’s helping to buy a home, or car, or for personal reasons. Unfortunately, many things can conspire against you, and it can leave you in two minds. Fortunately, low documentation loans could be the answer to the problem. A low doc home loan can allow you to get finance when you need it most.