What is a low doc loan?
06 May 2023
A low doc loan, also known as a low documentation loan, is a type of loan that is designed for self-employed individuals or small business owners who may have difficulty providing traditional documentation, such as tax returns, to prove their income. Instead of requiring a full set of financial documents, low doc loans typically only require a borrower to provide proof of income, such as a letter from an accountant or bank statements.
Low doc loans are most suited for:
- Self-employed individuals or sole traders: Self-employed individuals may have difficulty providing traditional documentation to prove their income, making low doc loans an attractive option.
- Small business owners: Small business owners may also have trouble providing traditional documentation to prove their income, especially if their business is new or not yet profitable.
- Borrowers with a significant assets: Low doc loans may require a higher down payment or collateral, so it’s more suitable for borrowers with significant assets.
- Borrowers who can provide alternative documentation: Low doc loans may accept alternative documentation like bank statements, profit and loss statements and a letter from an accountant.
Please note that, Low doc loans are considered higher risk for lenders, so they may require a higher interest rate, larger down payment, or more collateral than traditional loans, and are not as widely available as traditional loans. WizWealth Finance has a team of loan specialists for low doc loans and can assist you find a competitive low doc solution.