What You Need To Know About Taking Out a Loan
12 Aug 2018
At some point in your life, you may need a small or maybe even substantial business or commercial loan, maybe even a mortgage loan but for one reason or the other, you may lack the necessary documentation needed to access said loan. In this case, a low doc loan, or a low documentation loan as it is sometimes referred to may come in handy.
Well, what is a low doc loan exactly? A low doc loan is a flexible financial solution designed to give loans to people who have assets and income but are however unable to provide the financial statements and tax returns proof of their income. Low doc loans are quite popular with small business owners who would otherwise not qualify for a traditional loan.
- You may be wondering why a small or medium sized business owner may want to take this direction and the answer is really quite simple: there are a number of advantages associated with low doc loans. Here are some of them.
- Home loans for the self-employed: Every adult has a dream of becoming a home owner one day regardless of what they do for a living. When saving up to buy a home, the loan application process can be quite difficult especially if you do not have your documents well organised. Low doc home loans are specifically designed to help people who have bad credit, or those who have existing equity or a deposit saved up but don't have access to all of the financial statements normally required, for more information on obtaining low doc home loans visit this site. Basically, low doc loans enable you to get closer to owning your own home without having to deal with the normal red tape associated with financial institutions.
- Less paperwork: This does not mean that there is no paperwork needed. The only difference between the traditional loans and the low doc commercial or business loans is that the application process is simpler. All you have to do is provide proof of a regular income. The paperwork needed is a bank statement that shows how you have transacted and a letter from your accountant.
- People or organisations with bad credit scores can still be considered for a loan: Usually, if you have a bad credit score you would not be eligible for any kind of loan which means that if you are trying to get your life together, you would not be able to and as a result, you will remain in the financial hole you are in. With low doc loans, you or your commercial business could still eligible for a low doc business loan if you can reasonably present your case, click here to find out more.
Even though low doc loans are generally more attractive to customers in general, there is still some criteria the lenders follow.
First of all, the lender will need to prove that the customer in question has a steady source of income. For this, you need an Australian Business Number that has been registered for at least twelve months. Apart from that, you will need to put down a deposit in case of a mortgage, usually 20%, provide a solid credit history and evidence of existing credit performance which might include repayments on current loans and/or unsecured debts.
All you need to do is visit your local financial institution and talk to them about securing a low doc loan. That might be all standing between you and a business or commercial loan or even a mortgage.