The terms ‘low doc loans’ or ‘self-declaration loans’ are taken from the home loan industry and each car loan lender that has these available may label them differently, but they are similar to that of a low doc home loan for car loans, with two major points of difference, you may not penalised by a higher interest rate if you were to use this option and the vehicle must be used predominantly for business purposes.
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
All proof of income will be waived as long as the criteria are satisfied by the lender being applied to. Not every lender has low doc car loans available and each lender that does may be slightly different, 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 most lenders you would require to have held an ABN for a minimum of twelve months.
The only exception to this rule, is if the car is being used by an employee who uses their car for more than 50% business use, like a sales rep that receives a car allowance for example, but they would also need to be trading a car in, or have paid out a similar car loan within 6 months of the new application that was conducted well and also checkable by way of credit reference. Not every lender will allow this scenario though and the majority only offer low-doc loans for businesses.
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.
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 are a great option for those who don’t have up-to-date financial statements due to many circumstances, or for those who just want an easier, quicker approval as they manage their business day to day.