low doc loans

Low Doc Personal Loans (Self-Employed Personal Loans) in Australia 

Over the last few years, low doc loans have become increasingly popular as more look to alternative funding solutions. The truth of the matter is that lenders have taken a strict stance on borrowers because non-payers cost them millions per year. Even though most borrowers have the means to repay a loan, their applications are rejected. Fortunately, a low doc personal loan could provide self-employed individuals with the answer to the problem. So, what should you know about low doc personal loans? 

Understanding Low Doc Loans? 

Low doc loans have been around for several years and are similar to standard bank loans. A low doc personal loan, however, requires borrowers to show fewer documentation than a traditional loan. For instance, a traditional personal loan lender would often require payslips. A low doc loan lender doesn’t require them. Most lenders will accept alternative documents as proof of income.  

Low documentation loans are there for those who have income but won’t meet the typical approval threshold. Freelancers, contract workers, and even small business owners can benefit from this type of loan. Low doc loans have been created for those who may not be eligible for standard bank loans. That is why demand has grown in recent years because they give many borrowers a simple way to apply for a loan.  

What Will You Need for a Low Doc Personal Loan? 

Eligibility criteria may vary between lenders. Most, however, will require your ABN, personal bank statements, business bank statements (if applicable), recent tax returns and any assets you may have. A low doc loan can be a simple process as long as you have the basics at hand. You’ll also be required to show proof of your identity.  

It’s worth noting that most lenders will want you to sign an income declaration form. The form basically states what you usually earn in a month or year. These things can be crucial to obtain a low doc loan 

Be Careful of Interest Rates 

As you may already know, interest rates on a low doc loan may be slightly higher than on a traditional bank loan. It’s down to the lender classifying you as a high-risk borrower. Some will set their rates higher than others, so it’s worth shopping around to find the best rate possible. Of course, there are many things that impact interest rates. For example, if you have poor credit, the interest rate might be higher than expected. It’s the same if your credit is excellent; you might see a decrease in the rate.  

Choose a Personal Loan Best for Your Needs 

Personal loans are often necessary throughout life. There are times when finances don’t stretch as you’d like and the need for additional help is required. Low doc loans are an alternative to traditional loans because they are suited to those who tend not to be eligible elsewhere. It opens the door for so many and allows you to find an easy funding solution. Low doc loans can offer their positives and negatives, just make sure they’re right for your needs.