The terms ‘low-doc loans’ or ‘self-declaration loans’ started in the home loan industry and refer to a loan product that requires less documentation than what would normally be required of an applicant. When it comes to low-doc car loans there are two major points of difference, they don't always come with a higher rate of interest compared with normal-doc car loans, and the vehicle's useage often needs to be primiarly business use, which is generally not the case for low-doc home loans, which could be available to buyers purchasing a family home rather than just commercial properties.
SO WHAT DOCS DO I NEED?
- Proof of ID
- Proof of comprehensive insurance over the car being purchased
- Trust Deed or Partnership agreement if applicable to your business
Not every lender has low-doc car loans available and each lender that does may have a different criteria and document requirements, so this is a guide only.
SO WHAT IS THE CRITERIA TO APPLY?
The main thing to qualify would be that the vehicle is going to be used for more than 50% business use and with many lenders you'll need to have held your ABN for a minimum of twelve months.
In some rare cases employee's who need to drive as part of their day-to-day role can be provided with a car allowance which could be put towards a low-doc loan rather than a standard car loan.
ABN holders usually need to have had their ABN active for a minimum of twelve months and may be required to be registered for GST for a similar length of time. But this is not a hard and fast rule, so it’s worth doing your research to find a financier that will work with your business structure.
It's important to remember that applicants for low-doc loans still need to declare their income, they just don’t need to provide the same level of evidence for that income as you an individual would need too.
Low-doc car loans could be an option for those who don’t have up-to-date financial statements, or for those who just want an easier, quicker approval as they manage their business day to day.