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.