Traditionally, when it came to applying for finance, the self-employed person was significantly disadvantaged. With financial and income documentation playing such a significant role in the approval process, this often meant that sole traders were unable to provide financial institutions with the paperwork required to obtain a loan. Luckily for those people who are self-employed, lenders have finally realized the deficit in this area and they have really worked hard to open up the market for this group of people. This has been achieved through providing a wider range of low doc car loans especially designed for individuals who don’t have the supporting documentation required to obtain a conventional car loan.
So, who can apply for low doc car loans? Essentially, low doc car loans are designed for anyone that does not have the income documentation to support a traditional loan application. These loans are especially useful for sole traders, contractors, independent consultants and anyone who is engaged in changeable employment. For many years these people have experienced great difficulty when it came to getting finance, as they found themselves in a situation where they had difficulty showing proof of a stable and long term personal cash flow. Low doc car loans make it possible for anyone without evidence of long term earnings, to purchase a vehicle under finance.
How do low doc car loans work? They work like any other auto loan, except for the fact that very little paperwork is required. The one catch with low doc car loans however, is that slightly higher interest rates are generally applied. But, if you are in a position to make repayments that are above the minimum scheduled amount, then you will end up paying your loan off sooner, saving you money in interest and the higher rates of your loan will barely be noticeable.
When it comes to obtaining a loan that requires fewer documents, the most important aspect of your financial status that a lender looks at before deciding on whether or not to approve your application, is your credit history. Providing you do not have a bad credit history, you will generally be in a good position to be granted these types of loans. Lenders who deal in low doc car loans usually require bank statements as proof of your capacity to repay the loan, and when these statements satisfy their lending criteria, then low doc car loans are an easy and quick way to get you into a new vehicle.
Perhaps one of the most frustrating aspects of being self-employed is when it comes to getting finance. You may be confident in your abilities to afford such a loan, but convincing a lender can often be difficult without the paperwork to prove consistent and ongoing income. If you are in a situation where you know you can afford to make the repayments on a loan but just have difficulty in providing the proof of your earnings, then low doc car loans can certainly put you on a more equal platform to wage earners, when it comes to getting finance.