The main advantage of a low doc loan has to be the fact that alternative documents can be presented. For instance, if you don’t have the usual pay slips, then business activity statements and a declaration form could be used instead. It’s a novel approach to borrowing and it’s one that will continue to increase in popularity also.
So, what benefits do you get from a low document loan, and how easy is it to get approved for one?
Shorter Approval Times
Typically, lenders get whatever documentation they need upfront (including your credit score), and can make a quick determination over your eligibility. It means shorter waiting times and that can make a huge difference. There is nothing more frustrating than waiting weeks for a loan application to be approved. Fortunately, low doc loans tend to be quicker. It means a reduction in the application process and less frustration for you.
Traditional loans can be rigid. Lenders take time to go over your application and if you don’t have the necessary paperwork then it’s all for nothing. A low doc loan can be somewhat more flexible. It means you don’t have to provide the standard paperwork if you were to apply for a standard loan. It does offer some wonderful advantages and ensures the process goes much smoother.
Good Credit Will Take You Far
It’s important to note that your credit can impact the likelihood of getting low doc loans. The reason is that lenders use your credit to assess how viable you are as a borrower. If your credit is outstanding or above average, that will stand you in good stead. Unfortunately, if your credit isn’t great, that could impact the loan. Some lenders may not want to take a risk on you; others might increase interest rates significantly.
Can a Low Doc Loan Work for You?
It can be a great option to consider but of course, it all depends on your circumstances. For instance, you’re a casual worker. You earn less than $4,500 a year. You are supported by others, so a loan is probably out of your remit. On the other hand, if you had a thriving small business and earned $14,000 a year, that could be a different story. You have to remember, low doc loans have their uses, especially for those not eligible for traditional loans. You can also read about The Top 3 Mistakes to Avoid When Shopping for a Low Doc Loan by visiting https://www.ncocreditservices.com/the-top-3-mistakes-to-avoid-when-shopping-for-a-low-doc-loan/
At the same time, however, you still need the means to pay the money back. If you earn sufficient income to support yourself and your family then you are more likely to get your application approved. Again, it comes down to your circumstances and financial situation.
Choose a Loan That Works for You
A lot of people are torn over low documentation loans but the fact is they do offer some wonderful benefits. For instance, if you don’t have sufficient paperwork or don’t meet the income threshold of a traditional lender, a low doc loan could provide a viable solution. It can also work for you too. If you have the means to repay a loan, then it can be useful. Low doc loans are great options to consider and have helped many already. Click here to read about Lenders’ Interest Rates.