Loans are a great way to get back on track. You borrow a good amount of money, you show your collateral, you give them proof that you can actually pay back the loan – and then you go forward with the monthly payments until you are done with the loan. However, that is just the ideal case. For other people, there’s the option of low doc loans.
Why Low Doc Loans?
Sometimes, we do not have the necessary documentation; and if we do, it may not put us in a very good light – even if we do have the means to pay it. A lot of people work without having a signed contract – which results in no physical proof that they can pay the loan. And since banks are thorough, there’s no way that they are going to give you that loan unless they have the certainty that you can actually go through with it. You may get away with it if you present some collateral into the mix.
However, what if you don’t have valuable assets such as a home or a car either? If you are renting a place and also use a rental car or public transportation, that might also make things tricky. There’s nothing of importance that actually has your name on it, so you can’t use it as collateral. In these circumstances, low doc loans seem like a gift sent from the heavens. Since they are “low doc,” they won’t ask questions like a suspicious girlfriend. They won’t ask for work documentation, house papers, or your car as collateral, they are an option even for those who do not have the legal proof of their income.
Still, you know what they say about things that seem too good to be true; if you’re not careful enough, it will come right back at you to bite your leg. That’s why you need to make sure that you steer clear of hoaxes and don’t get sidetracked by the great things they supposedly offer.
Top Signs That Your Lender is Trying to Hoax You
No matter if you are applying for a personal loan, low doc loans, or whatever kind of loan, there are several red flags that will tell you if the company that you are going for is trying to scam you. Here’s how you spot them:
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They Ask for Money Right off the Bat
No lender that is legit will ever ask you for money right away – and that’s a fact. If you are required to give a registration fee, a down payment, or any other type of financial contribution during your application process, there’s only one thing that you should do. You should get up, say goodbye, and look for other brokers.
A legitimate broker for low doc loans will work for free in the initial stage, only taking the commission after you settled the deal. If you made a down payment before you even started your collaboration, don’t be surprised if you find out they took your cash and ran away with it.
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They Don’t have a Physical Address
They have a fancy company name. They have a phone number. They have a P.O. box. Yet they have no physical address. For all you know, they only set those online accounts so that you can send them the money – and then make a run with them.
A legitimate broker who handles low doc loans will have a physical address that you can verify. It may be a home address or an office address; it doesn’t matter, as long as it is registered. If they don’t, then it’s time for you to move on.
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The Guarantee that you’ll Receive the Money
If you’re applying for low doc loans to a company that will “guarantee you get the money” without even bothering to check with you on how you are going to repay, then it’s a sign that they don’t plan to stay around long enough for you to “pay” the loan. They’ll sign the contract with you, get your down payment, and then pull a Houdini act.
If You Were Scammed
In the event that you were scammed by a company offering low doc loans, you may want to contact the local authorities – and do so as fast as you can. Furthermore, even if you weren’t a victim of low doc loans scam, but know someone who is trying to do it, you should alert the police or the Fair Work Ombudsman to warn other consumers about this trap.
Overall, as long as you keep an eye out, it shouldn’t be hard to stay away from low doc loans hoaxes. Remember that if something feels wrong – then it probably is wrong. The moment you feel the red flag going up, waste no time and move on. When in doubt, you may always ask for advice from the friendly team at Bad Credit Loans.
