Everything about No Doc Lending You Wanted to Know
People who are contractors or self-employed may not be able to furnish all the papers to get loan. In fact, banking institutions do not provide the money due to lack of documents. Users who do have tax evidence can opt for no doc lending as it is available through an easy and hassle-free process. In such cases, you may need to go for the collateral loans and you need to submit the original papers of your assets to the lenders.
What is the amount that can be borrowed?
- You can borrow money against collateral however the total amount does not exceed more than 65% of the cost of the asset. Generally, the rates are higher by 2 to 3% and users have to pay interest for 3 years. But the interest rate is depending on your credit history and the lender can reduce the interest rate after certain time frame. If you repay their loans within the tenure, then they can also offer you top-up facility and they will increase the loan amount as per your request.
- People do not have to produce income evidence to the lenders and they do not have to produce BAS statements and accountant letters to the loan officers. In some cases, lenders may ask the borrower to sign a statement that they can afford to repay the loan.
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Objective of the loan
Security is the key for the users
- Lender enumerates a fixed set of criteria before awarding the loan to the borrower. To get the loan, property must be at a good location and it should be in good condition. Lender will inspect the property and they will disburse the loan on the basis of the property only.
- Nobody would provide loan if the asset is in a dilapidated condition. Generally, offices, warehouses and retail space qualify to be a good quality asset that can be used as collateral. Lender will disburse the loan according to the value of your property only.
Credit history
Although lenders may provide loan to people with no credit history, majority of them charge higher interest rate in case of the any problem with the payment issue in the past. Some lenders shy away from customers who do not pay the loan on time.Exit plan
- Loans that are given without any documents are subject to an exit plan. In addition, they are provided to the borrower only for a short period of time and after the total duration, the interest rate also increases.
- Before providing money, the lenders may verify the exit plan of the borrower. In most of the cases, the property is sold to pay off the debts.
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Who gives the loan?
- People may opt for private lenders that are dime a dozen in the market. They are given only for a very short duration of time. One of the most important benefits of the private loan is that it can be approved within 72 hours.
- The loan is similar to the home loans with fixed and variable interest rate options. It also combines line of credit along with 100% offset account.
Before opting for the loan, you should pay the credit card debts and the student borrowings. It can improve your financial condition. You can also the lender to check the bank statements for cash flow.
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