Why no doc commercial loans are growing in popularity

There are plenty of Australians out there who have now heard about no doc commercial loans. They may know a family member, friend, or co-worker who has implemented one and will be curious to know why this kind of service has grown in popularity over the last few years. There are many reasons for this, but usually it is because people don’t meet the requirements in order to get a line a credit from a main banking institution.

This can put many people in a very awkward position, especially when they are trying to do something good and proactive in their lives. Furthermore, many people will feel a bit dejected and defeated when they are rejected from a bank as not only will they feel like they aren’t a valued customer, but this rejection will usually show up as a black mark on their credit file. This will make it even harder for them to get a line of credit and it just ends up being a vicious cycle. As this is the case, there are many private lenders out there who are able to help with no doc commercial loans. This means that good people are still able to get a line of credit without having to jump through all of the hoops that are required by main banks.

No doc commercial loans are great for those who are in a hurry

While most business owners out there will understand that it is usually best to wait to take action, there can be times where people need to act fast in order to get themselves a good deal or in order to make more money in the future. As this is the case, sometimes people don’t have the time to jump through the hoops that are required by many banks and lenders out there.

 

It can sometimes take weeks of back and forth to get everything organised which sometimes people simply don’t have. As this can be the case, it can be very beneficial for people to explore the service that is no doc commercial loans.

No doc commercial loans are great options for those who have worked for themselves for many years

Another prominent reason why no doc commercial loans are growing in popularity is because many people out there work for themselves. Some will have gone straight from high-school or university to working at a sub-contractor or a sole-trader or may have even started their own business. This usually means that there isn’t a set wage and while this won’t affect what someone earns in a year, this can still be a negative attribute in the eyes of a bank.

A bank will want to see weekly, fortnightly, or monthly payments from an employer as well as payslips and bank balances. Someone who works for themselves will be able to provide all of these things, however, the amount earned may vary depending on what sales are like for that week, fortnight, or month. As this is the case, many banks will turn someone down for a line of credit, even when they are just as likely to pay back the money as someone who works a regular 9-5 job.

When this is the case, people are able to instead opt for no doc commercial loans where they are still able to get their line of credit and are treated like a valued customer at the same time. For all of these reasons and more, it is likely that this type of service will continue to rise in popularity for years to come.

What are the interest rates on no doc commercial loans?

There are many Australians out there who will find themselves in the position where they are unable to get a line of credit from a traditional bank. There can be many reasons for this but thankfully, people are now able to look into other options. This is because people shouldn’t have to miss out just because they don’t meet a certain criteria, especially when they are more than capable to pay back any money that they borrow. Furthermore, it can be imperative for many people to look into other options when they need to move fast on a deal that may not arise again in the future. As this is the case, many people look into an alternative that is known as no doc commercial loans. This is a line of credit that is borrowed from a private financial company rather than a bank. One of the best parts about going down this route is that people are able to feel like valued customers once again, instead of feeling like they are some kind of criminal when they visit a bank. While there are many benefits to this method, many will be curious to know about the associated interest rates. As this is such an important topic, this article will look into this further.

The interest rates on no doc commercial loans will vary depending on the time period chosen

Something that is unique to no doc commercial loans is that people are able to obtain a line of credit and pay it back over a much faster time period. This can be handy for those who expect to make their money back very quickly and so won’t need something that spans over 5 or 7-years. When this is the case, the person at hand is able to choose the length of their credit repayments which may increase their interest rates. This means that people can get access to quick and easy money and are able to pay it back over 12 or even 6-months. It is important to know that borrowing from a private lender will usually already have higher interest rates than usual and that these rates may go up again when someone chooses a short time period. Having said this, most people who are financially savvy and who know exactly what is going on with their money in the future, it still may be beneficially to go down this route even with the higher rates.

No doc commercial loans are generally 3-4% higher than a regular line of credit

While each lender will be slightly different, people can expect to pay approximately 3-4% higher interest than on a normal bank line of credit. This is because they are able to borrow money when they may not have all of the necessary paper work that a bank would require or because they have a bad credit rating. Whatever the case may be, people are usually more than happy to pay this rate as they are able to obtain the finance that they need. People do need to be aware, however, that there may be an early exit fee is someone decides to pay out the remainder of their loan early. As this is the case, people need to ask these kinds of questions before they make an application so that there are no nasty surprises in the long run. At the end of the day, each company will be slightly different and interest rates will also differ depending on circumstances. As this is the case, it is always better to check with the lender.

No Doc Loans: FAQ’s Answered

Applying for any form of finance can be a complicated and confusing process, full of supplying documents and signing forms. It’s no stretch to say that it can be a complete nightmare, and that is providing you have all the necessary paperwork! But what if you don’t tick all of the ridiculous boxes lenders require you to? More often that not, it means you’ll be unable to even start applying for the money, regardless of whether you know you can meet the repayments. For anyone self employed or with a variable income, it can be such a struggle. What may surprise you is that there are other options, ones that you will meet the eligibility criteria for. Self employed people, meet no doc loans. This type of finance isn’t hugely advertised, so it’s no surprise that you haven’t heard of it. So keep reading to find out everything you need to know about no doc loans.

 

What Are They?

Anything finance or banking related sounds intimidating and complex, but most of the time it really isn’t. No doc loans are no different; in simple terms this is a funding option that doesn’t require the potential borrower to provide the lender with any documentation of their income.

 

What Can I Get One for?

This type of loan is generally quite similar to any other finance option, and you can get one for a range of different purposes. Many people considering a no doc loan are business owners, so you are able to get funding to expand your business. As well as this, you are also able to use this for refinancing or debt consolidation. But, the best part is that you are able to use this form of finance to purchase a house.

 

How Much Can I Borrow?

The amount you can borrow really depends on the reason for the finance, what financial institution you choose and your credit rating. In most cases the lender is unlikely to give you more than $1,000,000. In terms of mortgages, many lenders will allow you to borrow up to 80% of the property value for a residential building, or up to 65% of the value for a commercial building.

 

What Are the Interest Rates?

As with any type of finance, interest rates will vary depending on the type of lender you use, how much you are borrowing and your credit history. However, no doc loans are usually a short term finance option, meaning the interest rate will increase after a few years. This form of credit is also considered as ‘rate for risk’, essentially, the higher risk you are to the lender, the larger your interest rate will be. Generally speaking, interest rates range from about 7%p.a to 11% p.a.

 

Can I Still Get the same Mortgage Options?

Despite the interest rate being slightly higher, you are usually able to get the same mortgage features as you would with a standard mortgage. This means you will have access to features such as: fixed interest rates, variable interest rates, line of credit, redraw facility, 100% offset account and salary crediting. So, just because you don’t need to provide proof of income when you apply, it shouldn’t usually impact the rest of the process. You will usually still be given the same options and will have the opportunity to choose the best repayment method and interest system to suit you.

 

How Can I Get One?

Many of the major banks and lenders in Australia no longer offer no doc loans, however, this isn’t to say it is impossible to get one. There are plenty of other options, such as smaller, specialist non-banks or private lenders. Although if you opt to borrow from a private lender, be very careful as they are not all reputable. If you are considering this type of finance, it is best to speak to a financial adviser or broker. An expert will be able to make sure you understand the terms of the agreement and ensure you get a competitive interest rate.