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Want a personal loan but don’t have the documents you need to apply?
Low-doc personal loans may be an option if you can’t provide:
Low-doc means “low documentation”, and they’re designed so lenders can approve money for people who can’t provide the usual bank statements or income info.
They are also used if your income is inconsistent (e.g. you only work a few months of the year).
This makes them very popular with self-employed workers, new business owners, and seasonal workers.
Below, we’ll cover off everything you need to know about getting one of these loans, and the different types of documentation you’ll need to give a lender.
First off, we’ll look at why these loans are usually more expensive than other loans, and how to make sure you get a decent deal.
Before we look at how to apply, it’s important to understand how low-doc loans are different from other loans.
Like other loans, approving a loan (and deciding how much you’ll pay) will be based on the risk you present to a lender.
The more proof (i.e. documents) you can give to show you’re able to repay the loan, the lower your risk will be.
This is important, because you’ll often be entirely responsible for assessing whether you can repay, and low-doc loans will usually have:
How can you reduce your risk without extra documents?
Bank statements, payslips, and tax returns will be very helpful in showing your ability to repay the amount you want to borrow.
If you’re applying for a low-doc loan, chances are you won’t have all (or any!) of these.
Thankfully, there are other ways to improve your chances:
Neither of these is a requirement for every lender.
However, both are an option to consider if you’re looking to get a lower rate or a cheaper loan.
So what do you need to qualify and actually get a loan if you’re self-employed?
Qualifying is pretty simple. Basic eligibility for low-doc applications requires you to be:
Most people can meet the qualifying criteria, but the tricky part comes in providing other types of documentation instead.
This can include:
Basically - the more documentation you can provide to your lender as proof that you’re able to repay the loan, the more likely it is you’ll get approved, and the better your repayments will be.
You may be able to get a low-doc personal loan if you have bad credit, however each lender’s credit policy will apply.
Yes. Low-doc loans are sometimes called self-employed loans. You will still have to provide a minimum level of documentation, which might include recent tax returns and personal ID.
Yes, it may be possible to get an unsecured low-doc personal loan. If you can provide security on the loan, it will be easier to get approved and find a better deal.
Generally, low-doc personal loans have higher interest rates than normal personal loans. Lenders charge higher rates to cover the increased risk of default.
Low-doc personal loans are commonly available for amounts between $2,000 and $50,000, but a few lenders offer as much as $75,000.
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