Conventional auto loan providers (credit unions and banks) like certainty. They need borrowers with regular and expected earnings, a wage in other words. However, there are millions of Australians are self-employed or work on a casual or seasonal basis. This means irregular earnings as well as no payroll package to hand over to the bank. That’s why there are Low Doc Loans exist.
What Is a Low Doc Loan?
Low Documentation (Low Doc) and No Documentation (No Doc) Auto Loans are auto financing choices typically used by the self-employed. Sometimes you will see these referred to as auto loans for Australian Business Number (ABN) holders or just self-employment auto loans.
The chief difference between Low Doc Auto Loans and standard auto loans is what you need to provide the lender when you apply. Rather than pay stubs, lenders will usually ask you to sign an income statement to prove your earnings. Or this proof can be given by your bookkeeper or accountant.
What Do Low Doc Auto Loans Provide?
When you’ve been approved, Low Doc Auto Loans work like standard auto loans.
- 1 to 7-year terms typically
- Can be used for used or new cars
- Borrow equal to $200,000 depending on the lender
- Distributor or private sale
- Weekly, biweekly, or monthly payments
- Can come with initial as well as ongoing fees
- Balloon payment choice can be available
Can You Obtain a Low Doc Auto Loan without the Statements of the Bank?
Lenders generally want to see your bank statements when applying for a standard auto loan. However, you won’t certainly have to provide bank statements with a Low Doc Loan. If you can generally demonstrate that you’ll be able to pay the rebates, you can still be permitted.
What Do You Require to Obtain a Low Doc Auto Loan?
What is needed for a Low Doc Loan differs depending on the lender you apply with. But in general, the least requirements are:
- Over 18 years old
- A permanent resident or Australian citizen
- An ABN holder (for a minimum of 1-2 years)
- Several lenders will need you also to be registered for GST
You may also be asked for information about:
- The car the loan is used for and how it is insured
- Your trade and how it generates earnings
- Any loans or debts you have
- Any other properties you own
Mostly, the more data you can deliver to your lender as evidence that you can afford the loan, the more possible it is that you will be approved.
What Interest Rate Can I Obtain on a Low Doc Auto Loan?
This will typically depend on what is involved in your application as well as what is in your credit history. Several Low Doc Car Loan borrowers with and good credit history who can offer solid proof that they are able to afford repayments may be qualified for reasonable rates. Possibly as low as standard auto loans.
You may want to consider a bad credit car loan if you have bad credit. However, a Low Doc Auto Loan usually comes with higher interest rates for the reason that they are generally considered riskier for lenders. The fundamental is still to compare the options so that you can discover the best rate.