Low doc loans have taken off in recent years as alternative finance solutions are sought. With a low documentation loan, you require fewer documents to prove your income and paying abilities. Most people are eligible for this loan when they have a steady (and regular) income, combined with a good credit score. Unfortunately, if they don’t have sufficient documentation to prove income, a traditional loan can be out of reach. That is why low documentation loans have become so popular. So, what benefits do you get from these loans and are they worth it?
You Don’t Meet a Traditional Lender’s Threshold
Standard lenders have a limit on who they’ll lend money to. Unfortunately, when you don’t have the traditional bank or financial statements to back your application, rejection isn’t far behind. It’s frustrating and occurs all too often. With a low doc loan, the lender’s threshold is lowered somewhat. You require less documentation to back your application. These loans are ideal for those who don’t quite make the traditional lender’s threshold. For instance, you have a steady monthly income but don’t have the financial statements to prove it. To find out more, check out www.lowdocloansco.com.au.
You Are Self-Employed
One of the biggest benefits of a low documentation loan is that if you’re self-employed, you’re more likely to be eligible. Remember, self-employed people, are classed as a risk to lenders. It is all about money and having a steady income. Self-employed individuals don’t always have a monthly salary and some months may be slower than others. That puts lenders in a difficult position. However, low doc loans can be a great alternative. They allow self-employed people to get the loan they need. Click the link to read about 7 Things to Know About Low Doc Business Loans in Australia.
Approval Times May Be Shorter
Traditional lenders go through a stringent checklist of what meets their approval. Every loan application is checked carefully and with more documentation to go through, it can lengthen the process time. It can be incredibly frustrating, and it often leaves you a little concerned. With a low doc loan, lenders typically offer a shorter application process period. This can be useful for those who need an answer within a few days. That is why more people turn to low documentation loans; they’re effective and may offer a quicker answer. You can also read about Does Competition Drive Credit Risk & Performance In Financial Services Lending? An Australian Investigation by visiting http://classic.austlii.edu.au/au/journals/JlLawFinMgmt/2007/9.html
Greater Flexibility for Applicants
Low documentation loans tend to be slightly more flexible and that is ideal for most borrowers. Of course, flexibility doesn’t mean you can pay one month out of seven. Instead, it’s about giving borrowers the chance of get a loan with less paperwork. It can be hugely important for those who can repay the loan but don’t have the paperwork to back their application.
A Simple Way to Borrow Money
Low documentation loans are incredibly useful for those who aren’t eligible for a traditional loan. They give you an honest way to build your credit history and get finance when you need it most. Low documentation loans are great because traditional loans don’t always work for every borrower. Low doc loans offer a simple but effective way to borrow money.