Traditional bank loans have lost a lot of ground to low doc loans in recent years and this is probably just the beginning because the standards of the banks are gradually more difficult to meet. A lot more people have discovered how easy it is to get the money they need without having to provide a ton of documents and being rejected in spite of their effort.

With all these, there are still many questions regarding low doc loans that people need to get answers to, in order to get a thorough understanding of how they work and what purpose they serve.

  1. Are low doc loans available for the self-employed? 

Yes. Actually, they are solely for the self-employed. Why is that? It’s all in the name of the loan itself. Self-employed people find it difficult to muster all the documents that banks ask them to provide so they can get a loan. Low doc loans are given out by lenders who don’t care about documentation as much as traditional lenders. They will need proof that one is able to repay the loan, of course, but that can be just a simple declaration.

At the moment, lenders can give low doc loans only to self-employed people, in compliance with the NCCT Act. Those who can provide proof of income are not eligible for these loans.

  1. Are these loans offered only by alternative lenders? 

No, a variety of banks can provide this service, as well. The CBA (Commonwealth Bank of Australia), for instance, is known to offer low doc loans. But then again, their terms could be a little harsher than those of the lenders you can find online.

  1. Does credit score matter? 

Not as much as it matters to banks but yes, it does matter. Credit history, too, can make the difference between getting a low doc loan and not getting it. If you’ve got plenty of stains in your credit file, the lender might not be willing to hand you money. Before you apply for one, check your file for errors and other things that might have caused a drop in your credit score. If there are any issues in the process of applying for the loan, you can try to explain to the lender why your credit score is so thrashed.

  1. Do they have higher interest rates? 

Not necessarily. This depends on the policy of the lender and how clean your credit file is. If you’ve been bad with money before, he might penalise you with a high interest rate. Some other lenders might offer low doc and full doc loans with virtually the same interest rates.  That’s why it’s so important to compare a lot of offers before settling for a certain lender.

Take a few options and weigh them against each other. The one with better monthly repayments and better terms should be your choice. If you can’t do this on your own, ask for professional advice from someone who has sufficient expertise in this field.

  1. Can you purchase a house with a low doc loan? 

Yes, it’s possible to get a mortgage even if you can’t prove your income the proper way. However, this is not something you want to do without talking to a broker first. Each lender has a different policy. Accordingly, there are many packages to choose from. Needless to say, you can’t do this on your own because you’re not familiar with how these things work. A broker can guide you safely through the low doc loan jungle.

  1. What is the LVR? 

LVR stands for Loan to Value Ration and represents the amount you can borrow against the secured property. This is a certain percentage of the value of the property. If you’re lucky, you could borrow as much as 80% of the value of the house. The higher the value of the property, the larger the sum you can borrow is. Be careful though: if you mess things up, you could end up with a lien on your house. The loan wouldn’t do you any good in that case.


Low doc loans are a real godsend for a lot of people, but it takes a lot of time until one can understand all the things that revolve around this concept. More information on this topic can be found on Business Loans.

Moreover, if you’re in need of a low doc loan and you need it fast, then we can help you. Even though a low doc loan is given fairly easily, you shouldn’t overlook the potentially disastrous consequences of neglecting it once you’ve taken it out. Your score will drop so lowly that there will be little to nothing you could do to get it back on the right track.

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