Low Doc Loan

Pros and Cons of a low doc loan 

There are many types of loans available today, including no-doc and low doc loans. Qualifying for a loan can be difficult, especially when you don’t have sufficient credit to back your application. Worse still, if you don’t have a regular 9-to-5 job, that can muddy the waters. Contractors, freelancers, business owners and everyone in between can often find their funding options cut short. It’s partly down to the fact they don’t have regular payslips to show lenders. Fortunately, no doc loans offer a viable alternative.  

So, what are the pros and cons of a no-doc loan? 

Pro: Alternative Financial Documentation is Accepted 

Whether you’re looking for a business or personal loan, it can be tricky to meet the criteria. Sometimes, you just fall short which can be incredibly frustrating, to say the least. With a no-doc loan, you get to use alternative financial documents. Like a low doc home loan, no-doc loan paperwork can also be far less exhaustive. It means if you don’t have the relevant documents to show lenders, you still are eligible for a loan. Remember, most people have the means to pay a loan but don’t have the paperwork to back them.  

Con: The Chance of Higher Interest Rates 

Every loan has interest rates attached, but no-doc loans tend to come with higher rates. Typically, this is because lenders believe you are a risky investment. It’s partly down to the fact you haven’t the financial paperwork to back your application. Of course, interest rates are dependent on a variety of factors. Like low doc loans, you should expect to see elevated interest rates with no documentation loans.  

Pro: A Fast Financial Option 

Like a low doc home loan, you need a speedy process time. Fortunately, no-doc loans provide an easy and fast solution. There isn’t a lot of paperwork to go through and you don’t have to worry about getting your supporting documents in order either. It can speed the process up and ensure your funds are available when you need them. No-doc loans are also beneficial to those who need a quick funding solution.   

Con: Borrowing Limits 

Lenders can limit how much you borrow at any one time. For instance, a lender may set your limit to $10,000 after reviewing your credit history. Some may set the limit higher or lower, it depends on you. That can be troublesome if you have a low limit but need to borrow above that threshold. That is why low doc loans and no-doc financial options have a cloud hanging over them.  

Pro: You Don’t Need Perfect Credit to be Accepted 

Like a low doc home loan, no-doc loans don’t require perfect credit. It’s great if your credit isn’t at its best. Remember, credit impacts your loan. For instance, some lenders will view your credit history as a way of setting their interest rates. If your credit history is really strong, some lenders might reduce your loan rate slightly. It could also work in reverse.  

The Wonders of No-Doc Loans 

A lot of people remain sceptical over low and no documentation loans but they are a viable funding solution. These loans are ideal for those who are contractors, self-employed, work as a freelancer or run a small business. Modern lenders are setting the bar high and your application can easily be rejected because of something trivial. No-doc and low doc loans can offer a good alternative.  

So why not explore them more? Check out www.lowdocloansco.com.au