Getting a bank loan when you have a poor credit rating is already difficult on itself. Even worse, if you have limited to zero financial documents that could prove your repayment capacity. That’s why lenders thought of offering low doc personal loans to supply the need to people who will not be eligible for bank loans because they cannot present income tax return, payslips and other proof of income.
Here are signs that you found the right loan package for your needs:
You checked all your preferences and this one offered the best terms.
Before sending your loan application to a low doc lender, consider your options first. You stand to gain the most from a wide array of lenders offering the same kind of loan. There is a huge competition in the alternative loans market which means more chances of you getting the loan with lower prices and easier repayment terms.
Don’t limit your freedom of choice by simply waiting for your bank to hand you the money, in exchange for very high interest rate. Remember that your choice can be a major setback that you have to seriously deal with in the near future. Your current financial condition may make you think that you need to settle for a certain type of loan because you have no other choice. But, you might be wrong. There are plenty of loan packages that alternative lenders offer which are far better than what some traditional banks and financing companies offer.
Read the loan agreement and keep a close attention to the information on fees such as origination fees, application fees and closing costs. Ask if there is a need to pay upfront fees. You also need to seriously consider the prepayment fee in case you plan to pay the loan early.
The loan officers answered all your questions
When you find the low doc loan interesting, don’t submit your application right away. Take time to contact the lender to know about the requirements eligibility and costs of the loan. If possible, write down all your questions on a sheet of paper before making the call. It will help you cover all issues that you’d like to clear up before submitting your application.
A lender who is not willing to discuss with you about the necessary documents, terms and conditions and timelines are probably hiding something which can cost you a lot.
Your credit score is not a big deal
If a lender is fine with your credit score, then it’s time to consider the offer. Look for a lending agency that gives special attention to people with bad credit. They usually offer reasonable loan terms provided you meet their eligibility criteria. Although your credit history has a huge influence on the creditors’ decision, there are lenders who give second chances to people who messed up financially. They offer favourable loan terms, easy payment terms and some offer tips on how you can easily pay them and rebuild your score at the same time.
Getting a copy of your credit history is also a good move, because it will help you check the accuracy of the entries and give you time to file a dispute with the credit bureaus to correct any errors in your credit report. This is particularly important—because even if alternative lenders do not rely heavily on credit scores, they will assess your payment capacity by your past usage of credit. If you have the habit of skipping payments in the past year, an updated payment history in the past few months may prove that you have changed for the better.
What if you have a good credit score, but you have no financial documents to prove your income? It’s not easy to obtain loans from banks and traditional financing agencies when you have no Income Tax return, payslips or other financial documents to prove that you have the capacity to repay them. If that’s the case, you can look for low doc personal loan lenders who are willing to give you low interest loans even if you cannot present the commonly required financials.
You have a sensible purpose for the loan.
It is not difficult to enjoy a luxurious vacation, luxurious wedding or to pay for important events in life when you have access to low doc loans for people with bad credit. But, a loan is something that you borrow from your future income, so it is still important to seriously consider your reasons for getting a loan.
If you can possibly afford it, and it is something that you really wanted or needed, then go for it.
But, if you can’t afford it, you should probably think about looking for another loan with lower cost.
Check our latest low-cost, fast approval low doc personal loans. Make an enquiry today!