If you are unable to furnish proofs of your stable and consistent income, and yet need a loan, then you may often get rejections from banks, financial institutes, or lenders, which can be frustrating. The no doc loan lending companies understands this agony of the borrowers. Hence, such companies have come up with a solution for the common man with a no income proof. Anyone without a low income or no income proof can approach such no doc lending companies to fulfill their wishes for getting funds to perform certain transactions like buying or investing in properties, etc.
A no doc or no document loan is meant for people like self-employed, freelancers, seasonal workers, immigrants, etc. who have no stable income, and no salary slip or paycheck of income to show. For them, it can be difficult to convince a lender, unless the lender borrows on simple terms without much documentation. It is then that you need a no doc lending. You do not have to show any proof o income for such loans. Hence, the terms are different than other normal loans.
How a no doc loan is different
No documentation means you are already getting a big favor from the lender. Hence, you will have to suffice in another way that is by paying a hefty amount for the down payment. This serves as the security that you are an authentic borrower who will pay back.
Your income or assets are not verified by the lender, neither your employment status. In fact, you need not show them that you are earning in case of no doc loans, as this may not be your state at the time of borrowing. It hardly matters or influences the process.
Obviously, the interest rate would be higher with a no doc lending, and this is understood. You may run away with the money and the lender will have nothing much to do than to sue you. Hence, you are made to pay higher interests. You can take the chance when you are getting your dream home or property easily without no documents and hassles.
The main criteria which you must fulfill for getting a no doc loan is to maintain a sound and good credit score, which should not be in any way below 740. If this is below 740, which is the threshold limit, you will not be getting the loan approved. This is the only big hurdle in your path. If you have a good credit rating, or have worked hard over the years to maintain or improve it, you can be sure that you will get this loan guaranteed.
How to apply
To apply for a no doc loan, you will have to make a file of your whereabouts. You must properly list down your identity, the details of the project you are asking loan for, your property, and assets, etc. You need not bother about earning proofs or assets seriously. If you have any, they will be an added advantage. In case, you cannot furnish any, you are still good to go with a simple file carrying your information along with loan purpose. Then you should try to find out the no doc lending companies in your area. The internet is a good option to do this searching and research. You can talk to many companies online and over phone. Finally, you should start applying at some sorted places.
Before accepting funds, always make sure that you know of all said and unspoken terms and conditions. So that, you do not get any surprises later. This will make the overall experience smoother for you.
Article by Amelia Varley