Low doc personal loans
If you’re self-employed and worried about your eligibility for a personal loan, you’ll be pleased to hear there are alternative options to having to produce payslips or other documents to verify your income. So if you discover you need cash in a hurry or want to plan for an important event or purchase, a low doc personal loan may offer you a solution.
What is a low doc personal loan?
Instead of the usual lengthy documentation often required for a personal loan application in Australia, your application for a low doc personal loan will be assessed based on your credit history and for how long you have been operating your business. You may need a letter from an accountant to support the application. There are options for both secured and unsecured low doc personal loans and often you can secure a low doc loan on, for example, your car or your home. In this case loan to value ratio (LVR) may be applied, which is the amount you want to borrow divided by the value of the secured item.
Why do people use low doc personal loans?
There are several reasons why you might want to apply for a low doc personal loan:
- If your business needs a cash injection to increase your working capital, then a low doc personal loan may be used;
- You can also fund major purchases, such as buying a boat or paying medical bills by taking out a low doc personal loan.
What are the main features?
Low doc personal loans may be secured on property or other valuable goods, or may be unsecured, depending on the purpose of the loan and the lender’s regulations. You can apply for either a variable rate or a fixed rate personal loan. Some lenders will allow you to repay your loan early, however, they may charge a fee for this. Applications for a low doc personal loan are generally quick and easy, no matter where in Australia you live.
What are the pros and cons of low doc personal loans?
Undoubtedly applying for a low doc personal loan is less hassle for you as a customer because there is no need to supply vast amounts of documentation to prove your level of income. This means getting a low doc personal loan is generally a quick process, with many lenders simply asking potential borrowers to sign a statement relating to their ability to make repayments. Most lenders will tailor the repayment schedule to your needs as a customer, offering flexibility.
The ease of getting a low doc personal loan might tempt you to borrow more than you can easily afford to pay back, so it’s worth making sure you do have the means to meet the repayment schedule. You may be charged higher interest rates for a low doc loan and there may also be fees if you repay your loan early.