Low Doc Personal Loans

Name: Low Doc Personal Loans
Creator: Savvy
Published: 2021-01-11T17:02:05+10:30

Home > Personal Loans > Low Doc Personal Loans

It won't affect your credit score.

Written by , updated on July 4th, 2024

The features and benefits of low doc personal loans

Available to self-employed workers

These loans are great for self-employed workers who don’t quite have the funds to cover their expenses but don’t have the last two years’ worth of tax returns.

Alternative documentation requirements

You can utilise documents such as BAS, bank and profit and loss statements, ABN and GST registration and an income declaration instead of your returns.

Borrow up to $10,000

You can apply for any amount between $2,000 and $10,000, making them versatile for both smaller and more substantial expenses that need to be covered.

Diverse eligible income streams

On top of your income from your business, you can have other income streams such as casual and Centrelink earnings included in your overall income.

Use them how you like

Whether you want to consolidate outstanding debts, cover medical costs for your family or pet or even go towards your wedding , you can use your funds to do so.

Bad credit accepted

A bad credit score won’t get in the way of approval, either, with our flexible partners accommodating your situation and able to approve you for a second-chance loan.

Low doc personal loans explained

What are low doc personal loans?

When applying for finance, you need to submit documents to prove that you can financially afford to repay the debt. Sometimes people do not have, or are not able to provide the necessary documentation required for a standard personal loan. A low doc personal loan accepts alternative documents when assessing eligibility.

Low doc doesn’t mean that you can get finance without convincing the lender that you can afford it. It simply means they will accept alternative documents and verification of your financial history.

Who are low doc loans for?

Lenders commonly use low doc personal loans for self employed people. This is because business owners and those who are self employed may have difficulty proving their income amount as they typically do not receive payslips or group certificates.

Will I need to prove my income?

Under the National Consumer Credit Protection Act 2009 (NCCP), lenders must assess if the product is going to be unsuitable for you. This includes verifying your income to ensure you are able to afford the debt. Under a low doc basis, a lender will ask for alternative documents to satisfy affordability requirements.

Documentation requirements vary across lenders, but there is a range of documents that may be used. Some documents that may be accepted are:

Business Activity Statements (BAS) for the past 12 months
Bank statements
Details regarding your ABN registration
Evidence of GST registration for at least 12 months
A letter from your accountant verifying your income
Potentially Profit and loss statements from accounting system
Your current balance sheet for accounting system
Australian driver’s license or passport to prove your identity

What are the benefits of a low doc personal loan?

Without accepting alternative forms of documentation when assessing an application, people with limited financial documentation may need to resort to more expensive finance options such as payday lending that have higher fees in comparison. By providing a low doc alternative to regular personal loans, self-employed people, and anyone with limited financial documents are able to access more affordable finance for larger amounts.

Types of personal loan

Unsecured personal loans

With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.

Secured personal loans

Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.

Variable rate personal loans

Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.

Fixed rate personal loans

Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.

Debt consolidation loans

If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.

Travel loans

Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.

Wedding loans

There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.

Renovation loans

Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.

Self-employed loans

Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.

Student & education loans

There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.

Green loans

Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.

Why compare personal loans through Savvy?

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Paperless applications

You won't need to worry about sifting through documents and visiting the post office, as they can all be submitted online.

Reputable lending partners

We've partnered with personal loan companies you can trust to ensure your comparison is a high-quality one.

Top tips for getting approved for a low doc personal loan

Ensure your credit history is in good standing

A high credit score increases your chances of being approved as it shows the lender that you are committed to paying your bills and debts consistently on time.

Use a guarantor

Having a guarantor on your application could be the factor that gets you across the line. The guarantor is not required to help you make repayments, but it ensures the loan will be repaid if you default.

Consider a joint personal loan

If you are unable to get approval on your own, consider applying with another person. Keep in mind that both people are responsible for the loan, so this is suited to a spouse or business partner.

Low doc frequently asked questions

Can I switch from a low doc to a full doc product?

After a period of time, If you have the appropriate documents required for a full doc loan, it is possible to refinance. Refinancing may be able to provide more flexibility and a better interest rate.

Is my credit history assessed?

Yes. The lender will undertake a credit check to make sure you’re likely to repay the debt.

What is the difference between secured and unsecured?

A secured loan is backed by a valuable asset — such as a house, car or boat — to be used as collateral. In the event that you default on the debt, the lender will take the asset to recoup the money that was lent out. Unsecured simply means there is no asset used as security.

Can I apply with my partner?

Yes – this is known as a joint personal loan. Signing up in this manner can help you increase your chances of approval, as well as potentially your borrowing power. However, even if one applicant has the documents required for a standard loan and the other doesn't, it'll still be a low doc personal loan.

Will a bad credit score affect my borrowing capacity?

Yes – if you have bad credit and are looking to apply for a low doc personal loan, your lender is likely to place greater restrictions on your borrowing. However, bad credit borrowing generally comes with the same restrictions of up to around $10,000.

Should I choose low doc or a small personal loan?

Small personal loans are another option available to borrowers who don't meet the conventional eligibility criteria. These are more restrictive in terms of borrowing amount, offering amounts from $300 to $5,000 and charged fixed, capped fees in place of interest. You may wish to take out a small personal loan if you need the money within a matter of hours or only need a small amount, while low doc personal loans are more suitable for more substantial expenses.