What are the Types of Low Doc Loans Available in Australia?

Types of Low Doc Loans: Self employment is now a popular alternative to working a conventional 9-5, with people now choosing to blaze their own trail by starting their own business or turning a side occupation into a principal profession.

While a traditional low-risk prime full doc loan is dependent on the borrower having standard, predictable, and regular payslips and expenses to demonstrate creditworthiness, borrowers who are Self-employed often do not have up to date lodged tax returns. These Self Employed borrowers who do not have 2 years of lodged tax returns will require a low doc loan.

Near Prime Low Doc Loans

A loan type that offers great rates to self-employed owners while providing multiple types of income verification options. Examples include, self-employed entrepreneurs may not have two consecutive years of full annual tax returns or, for example, their full-year financials do not accurately reflect the current trading conditions of their company.

Specialist Low Doc Loans

Typically, this loan product is suitable for people who have a very poor credit history or people who cannot be fully approved for a traditional loan.

Opportunity Costs

In some instances, applicants may want to hold off until their situation changes and they are eligible for a prime loan. However, they will incur opportunity costs.   This is the costs of delaying a purchase (until they qualify for a prime loan) and missing out on the opportunity. Such costs can far outnumber the benefits of obtaining a loan now.