Low doc car loans are available if you’re self-employed or work as a contractor or freelancer and don’t have a regular income. They are ideal for borrowers who do not meet traditional lending criteria. 

What is a low doc car loan?

Most Australian car loan applications require a lot of paperwork to prove you can afford repayments.

But what if you don't receive regular payslips from an employer?

Low doc car loans aruseful as they are offered to borrowers who don’t meet the standard lending criteria including the self-employed or people with a poor credit history

You don’t need as many documents to apply for a loan, though you may need a letter from an accountant to support your application and ability to make repayments. 

Why do people use low doc car loans?

For some borrowers, applying for a low doc car loan is simpler than applying for a standard car loan. This means self-employed borrowers can buy the vehicles of their choice, subject to a lender’s approval.

Some car loans are only available if you're buying a new vehicle, but many lenders will let you buy a second-hand car as long as it has been certified as roadworthy. 

What are the main features of low doc car loans?

Low doc car loans let borrowers apply with less paperwork than other types of car loans, though they typically have higher interest rates than regular car loansThey may be secured by the value of your car or some other asset, such as equity in your home.   

You can often choose a variable or fixed interest rate car loan and most lenders will let you use the vehicle for both personal and business purposes. While some lenders will let you repay your low doc car loan early, you may be charged an early repayment fee. 

What are the pros and cons of low doc car loans?

  • Low doc car loans make buying a vehicle easier for borrowers who don't receive regular income from an employer. 
  • Applying for a low doc car loan can involve less hassle, as you don’t need to provide as much paperwork to prove your income. Some lenders simply ask borrowers to sign a statement confirming their ability to make repayments. 
  • As a low doc car loan means an increased level of risk for the lender, you may be charged a higher interest rate compared to a regular car loan, so make sure you can afford the repayments. 
  • There may also be early repayment fees if you repay your loan early. 

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