Low doc loans in Australia are loans designed to give opportunity to the self-employed to obtain personal loans when it is impossible for them to present payslips, tax returns and other proof of income. Despite its minimum loan requirements, traditional lenders conduct strict verification process to ensure that applicants are not tampering paperwork to qualify for loans and that they are not likely to default on their loans.
The Australian government warns people about using low doc loans to invest in questionable investments often promising high returns. It may also result to loss of savings and properties especially when used for Ponzi scheme-type property and other investments.
The following are the features of low doc loans:
The lender relies on your own declaration. You don’t have to present the traditional proof of income such as tax returns and supporting documents of your income or employment.
Higher interest rates:
low doc loans attract borrowers who cannot show proof of reliable income or assets. Lenders may charge higher interest rates and fees to offset the risk of lending to high-risk borrowers. . you may choose between a fixed or variable rate option depending on your financial condition.
You can use low doc loans to finance your immediate personal or business needs. It is a suitable option to those who have less time to apply for other loans that require traditional proof of income.
Things to consider when applying for low doc loans
- Actual need.
Before applying for low doc personal loans, ask yourself if you have an actual need. Do you have other loan options? Consider the purpose of your low doc loan and make sure that you are getting a lower rate than other available options. For instance, if you are planning to make improvement to your home a home equity loan may give you a lower rate. For medical bills, check if you can still use your medical insurance.
Low doc loan has attractive features, but make sure that you are not obtaining a loan for the wrong reasons.
- Repayment plan.
Do you have the ability to repay your loan? Not having the supporting evidence of a reliable in come or stable assets can be an evidence of your unstable cash flow. Make sure that you have a back-up repayment plan in case your financial situation worsens. Or, better yet, talk to our debt management specialists who can help you find the most suitable loan option and walk you through the debt management strategy that can improve your financial health.
Australian Lending Centre provides low doc loans to thousands of Australians without charging outrageous interest rates. Whether you are a freelancer, self-employed or business owner without verifiable month-to-month income or consistent cash flow, we can help you meet your financial needs.