Low doc home loans have taken the whole world by surprise lately for the ease with which they can be availed by anyone in need.
Due to the reduced amount of documentation work required in accessing them such loans have become extremely popular with borrowers.
Something that could be termed as a revolutionary innovation in the financial market, Low doc loans have assisted numerous people world over in changing the course of their life in a positive sense. Considered to be loans that could change the future of a business, low doc loans have surely helped thousands of people around the world in realizing their dreams. These loans are not only hassle free in nature, but could be availed at levelheaded rates as compared to other financial products in the loan market at least under the present circumstances.
7 things one should know about low doc loans
Low doc home loans or low documentation loans are particularly designed for the people that are unable to produce the obligatory documents that make it possible to avail conventional loans from the financial institutions.Therefore, anyone ranging from unemployed individuals to small scale businessmen can avail these loans during the times of need with minimum fuss. In order to avail these loans, a person is required to put forward an application with self-verification certificate without any obligation of property ownership and related affidavits.
1. Everyone is eligible
Aspirants with impaired credit history or those with poor credit ratings can also avail these services. Although, it requires some extended, if the services give you access to loans, it’s worth the extra effort.
2. Varied form of interest
Although, low doc loans are much easily accessible than standard loans, borrowers might have to shell some extra money in the form of rate of interest. The rate of interest in increased because the risks of loan defaults involved is greater than in the case of normal mainstream loans from banks. The person should be discreet and far-sighted in impending upon the lender that not only offers advance at a lesser interest rate than others in the market, but also charges no supplementary collateral.
3. Require additional security
The additional fact that should be kept in mind while accessing low doc loans is that they require extra security. The amount of collateral required as pledge is far more than in the regular cases and hence the aspirant should be well versed with fact in advance.
4. Enhanced features
One of the best features of the low doc loan is that the borrower gains extended access to a range of loan features and options that were previously unheard of or available for him in the market. Such loans could also be termed as a time and money savers for the informal and self-employed workers who find it hard to avail loans.
5. Increased opportunities to earn credit
At present, due to increase in competition in the lending market, majority of the big names in the lending business, including the banks now offer low doc loan services. Earlier, only non banking financial institutions with limited presence used to offer these loans to the aspiring candidates.
6. Lucrative proposal
Usually as seen the world over, low documentation loans cover up to 80% or more than three quarters of the residential property in case the candidate intends to acquire one for investment purpose in the days to come. The remaining 20% of the amount has to be infused by the person into the portfolio. This makes the proposal lucrative for the people intending to invest in some property and in need of urgent loans with minimum of paper work involved.
7. Beware of cheats
With the boom in the low doc home loan market in recent years, many lenders with dubious credentials have mushroomed the world over and are claiming to provide loans at lower rates than credible institutions. This has resulted in numerous scandals. Therefore, people should beware of such cheats.