A low documentation car loan is a form of finance for individuals who do not have a comprehensive set of financial records to support what would otherwise be a standard car loan application. For example, if you don’t have any income tax records, or payslips to provide a lender, this would normally make you ineligible to apply for a loan. Fortunately, however, low documentation lows, sometimes referred to as alternative documentation loans, are designed to make your life easier.
What are some of the common circumstances for a low documentation car loan?
Believe it or not, low documentation car loans have quite a broad appeal because of how many instances where they may be suited for applicants. It doesn’t matter if you are any of the following, as each of these individuals may apply for a low documentation car loan.
- An individual new to the workforce
- A retiree with government or investment income
- An owner of a newly-founded small or medium business
- An independent contractor
- Recent migrant to Australia
- Unemployed individuals
- Someone with an irregular pay schedule
- Those outside of normal lending requirements
Ultimately, there are no shortage of people who may find themselves interested in a low documentation car loan, but you would be more likely to do so if you are having trouble finding necessary documents, haven’t filed your recent tax return(s), often claim large deductions, have privacy requirements, or where the distribution of your income and assets are executed in a complex manner.
What are the benefits of a low documentation car loan?
There are several benefits that come with securing a low documentation car loan. These include:
- Reduced time: while normally you would have to spend extensive time getting all your documentation in order before applying for a loan, this specific form of finance only requires you to provide recent bank statements, as well as personal information or details on your business.
- Quick access to finance: Because of less stringent requirements associated with low documentation car loans, this can translate into a potentially quicker turnaround to receive funds. In fact, the funds can be immediately credited as long as the lender feels comfortable with your credit history and your ability to repay the loan in full and on time.
- Confidentiality: If you are concerned with privacy and limiting what information you share with those you don’t know, then a low documentation car loan can help you achieve just that. Provided you have a good credit score, you won’t need to supply your income tax returns or any other comprehensive financial documents, typically just your bank statements will do.
- Improve your credit history: A low documentation car loan can help you build your credit and improve your credit score. Of course, to facilitate this, you need to fulfil all your obligations under the loan. If you plan to take out further finance in the future, and you expect that you may require a low documentation car loan at another point in time, this is an invaluable benefit that will increase your creditworthiness and the prospect of more ‘attractive’ terms in your next loan.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.