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When you apply for a personal loan, you’ll need to meet certain eligibility criteria and prove to the lender that you can afford to pay back the loan. If you’re self-employed or have a limited financial history, meeting some of the asset and income criteria can be challenging, especially when it comes to producing payslips. A low-document or low-doc personal loan gives you access to funds without the usual lengthy loan application paperwork.

When you apply for a low-doc personal loan, the lender will assess your credit history and, if you’re self-employed, they’ll look at how long you’ve been in business. Depending on the lender and your circumstances, a letter from your accountant may help you get around providing conventional proof of income. Low-doc personal loans can either be secured by an asset like a car or home or be unsecured. There are plenty of low-doc loans on the market, so before you make a decision, it always pays to compare your options.

How do low-doc personal loans work?

Low-doc personal loans work the same way as more traditional personal loans. You enter into an agreement with a lender to borrow an amount of money which you pay back in monthly, fortnightly or weekly repayments. The main difference between a low-doc and a standard personal loan is the amount of documentation required to prove your income. With a low-doc loan, you don’t need to provide as much documentation and proof of income like payslips or tax returns.

From the lender’s perspective, low-doc loans are generally riskier because, in most cases, the borrower can’t prove that they’ve got a regular income. To counter the risk, the interest rates on low-doc loans may be higher than other secured or unsecured personal loans. Much like traditional personal loans, a low-doc personal loan can be secured to property or other assets like a car or jewelry or can be unsecured.

Because you usually have discretion over how the funds are used, people apply for low-doc loans for all sorts of reasons. It could be to get a business idea off the ground or to fund a big-ticket purchase like a holiday, boat or caravan. You could also use a low-doc personal loan to pay medical bills or fund small renovations.

Given that there’s usually less paperwork involved, applying for a low-doc loan is generally a relatively simple process.

How do I apply for a low-doc personal loan?

Applying for a low-doc loan is a lot less hassle than applying for a traditional personal loan. Once you’ve compared the various low-doc loans on the market and you’ve decided on a loan that suits your needs, the actual application process is quite simple.

Depending on the lender, you may need to provide some of the following information:

  • If you’re self-employed, you might need to supply details such as your ABN and/or Certificate of Incorporation
  • Your business activity statements for the past 12 months which have been verified by the Australian Tax Office (ATO)
  • Confirm that your income has been registered for GST for at least 12 months
  • Show the last two years of your full personal and/or company tax returns to prove your income
  • Show profit/loss statements
  • Recent bank statement detailing your savings and business transactions.
  • Depending on the lender, you’ll need to provide an Australian driver’s licence or passport to verify your identity
  • Lender may ask for a letter from your accountant

Because each lender has their own requirements, some lenders may simply ask you to sign a statement confirming your ability to make repayments.

While low-doc loans can be appealing given their convenience and ease, they should really only be used for people who don’t meet the eligibility criteria. For all their positives, low-doc loans do pose an extra risk for the lender, which in turn means they generally have higher fees and interest rates.

Things to consider before applying for a low-doc personal loan

Low-doc personal loans are a lot easier to apply for than traditional personal loans. This may create the impression that borrowing money is easy and you may be tempted to borrow more than you can afford to repay. You should really only apply for a low-doc loan as a last resort and, regardless of the amount you borrow, always be sure that you can pay back the loan.

When comparing types of low-doc personal loans, don’t forget you’ll have to pay interest on the amount you borrow. If your interest rate is 12 percent, for every $1 you borrow, you’ll have to pay back $1.12. It might not seem like a lot to add to one dollar, but it all adds up and compounds quickly.

Because this type of loan requires less documentation and proof of income, you may find that that low-doc personal loans don’t have as many features as other types of personal loans.

If you’re looking for a quick and easy loan, a low-doc personal loan can be a useful solution. Before you lock yourself into a low-doc loan, it’s important that you consider all your options and make sure you can afford to make the repayments. If you don’t have a stable income and you’re under financial stress, a low-doc personal loan may put you into more debt.

Not paying back your low-doc personal loan can have some serious implications and cost you extra in late payment fees. Before you decide on the amount you want to borrow, make sure you plan how you’re going to make your repayments and whether you can actually afford to pay both the principle and the interest back.

Like any other type of personal loan, pay close attention to the interest rate. When you’re comparing low-doc personal loans, look out for both the advertised rate and the comparison rate. The advertised rate is the cost of the loan without any of the fees, whereas the comparison rate includes all the additional charges and gives you a more realistic cost of borrowing the money.

Are there advantages to low-doc personal loans?

If you’re self-employed or have a limited financial history, there are some advantages to a low-doc personal loan. The main advantage is that they can be easier to apply for because you don’t need as much documentation to prove your income. Because there’s less paperwork, a lot of low-doc loans have a quicker turnaround time.

Low-doc personal loans tend to have higher interest rates and fees, making them less advantageous in certain circumstances. If you’re looking to use the loan to buy a car, you might be better off opting for a secured personal loan and taking advantage of a lower interest rate. In most cases, a low-doc personal loan will have a lower interest rate than a credit card, which makes the loan an attractive option for debt consolidation.

Before you apply for a low-doc personal loan, our online loan comparison tool will help you compare top low-doc personal loans from dozens of lenders.

Frequently asked questions

Are there low doc personal loans?

Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.

It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

Can unemployed single parents get personal loans?

It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.

If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

Is a personal loan a variable or fixed-rate loan?

Depending on the personal loan lender, you may be able to choose between a fixed and a variable interest rate. But, there are a few distinct differences between the two, so it’s important to weigh up the pros and cons before deciding on what’s right for you.

A fixed interest rate loan gets you the convenience of knowing exactly how much you need to repay each fortnight or month. On the other hand, you generally won’t be able to make lump sum or advanced payments to close your personal loan early - or at least not without a penalty.

With a variable interest rate personal loan, you may be able to get a longer loan repayment term, with the option of paying off the loan early. You typically won’t need to pay any additional charges for an early full repayment either. The potential disadvantage with an interest rate that can change is that your repayment is not entirely predictable, as it can fluctuate with the market. However, you’ll likely have more options as more lenders offer a variable interest rate personal loan.

What do single parents need for a personal loan application?

Much like applying for other personal loans, applying for personal loans for single parents will likely require the following:

  • Proof of identity
  • Proof of residence
  • Proof of income
  • Details of assets (e.g. car, home)
  • Details of liabilities (e.g. credit cards, other loans)
  • Loan amount
  • Loan term

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

Can I merge my personal loan with my home loan?

Yes, you can refinance your home loan and, in the process, merge or consolidate your personal loan and home loan. By doing so, you can lower the number of debts you have, and you may also reduce the total interest you have to pay.

However, you should consult a financial advisor or a mortgage broker to confirm that you are decreasing your total outstanding debt, including interest payments. The repayment term for a home loan can be much longer than that for a personal loan, and by merging the two, you could be repaying a higher amount over the full term.

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

What do single mothers need to apply for a personal loan?

Like other personal loan applicants, single mothers will likely need to provide a few documents to any potential lender, such as personal identification, bank statements (savings, loans, credit cards), proof of address, and proof of income (payslips, tax returns).

What are the Westpac personal loan eligibility criteria?

The process to apply for a personal loan from Westpac is simple and can be done online. To be eligible for a Westpac Bank personal loan, you must meet the eligibility criteria. These include:

  • You should be over 18 years old
  • You must be a permanent resident or hold a valid visa with confirmed employment in Australia
  • You should earn a regular and permanent income of at least $35,000 before taxes

If you feel you meet these eligibility criteria, you can apply for a personal loan with Westpac. With your application form, you’ll also have to submit the following documents:

  • Personal details including name, contact information, and residential address 
  • Proof of identity such as drivers licence or passport details
  • If you’re self-employed, you’ll need a list of assets, savings, investments, and liabilities as well as your most recent tax return information
  • If you’re an employee you’ll need to submit information related to your employment and finances like bank statements and payslips

Westpac Australia personal loans are available for amounts from $4,000 up to $50,000 and loan terms of up to seven years.

Do student personal loans require security?

While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, which typically have higher interest rates.

Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will fully or partially guarantee the loan, taking on the financial responsibility if the borrower defaults.

Can I get a $4000 personal loan if I’m unemployed or on Centrelink?

Before most providers of personal loans or medium amount loans will approve an application, they’ll want to know you can afford the loan’s repayments on your current income without ending up in financial stress. Several lenders don’t count Centrelink benefits when assessing a borrower’s income for this purpose, so these borrowers may find it more difficult to be approved for a loan.

If you’re unemployed, self-employed, or if more than 50% of your income come from Centrelink, consider contacting a potential lender before applying to find out whether they accept borrowers on Centrelink.

What do I need to get a fast loan?

Most lenders will need to you provide the following information in your application for a fast loan:

  • Proof of identity
  • Proof of residence
  • Proof of income
  • Details of any assets you own (e.g. car, home etc.)
  • Details of any liabilities you owe (other personal loans, credit cards, mortgages etc.)
  • How much you want to borrow
  • Over how long you want to pay it back
  • Purpose of your loan

Are there alternatives to $2000 loans?

If you need to borrow $2000 or less, alternatives to getting a personal loan or payday loan include using a credit card or the redraw facility of your home, car or personal loan.

Before you borrow $2000 on a credit card, remember that interest will continue being charged on what you owe until you clear your credit card balance. To minimise your interest, consider prioritising paying off your credit card.

Before you draw down $2000 in extra repayments from your home, car or personal loan using a redraw facility, note that fees and charges may apply, and drawing money from your loan may mean your loan will take longer to repay, costing you more in total interest.

Can you get an emergency loan on Centrelink?

When many lenders assess a borrower’s income to determine whether they can afford a loan’s repayments without ending up in financial stress, they may not count Centrelink payments as income for this purpose.

Before applying for an emergency loan, it may be worth contacting a potential lender to find out if they accept applications from borrowers on Centrelink.