Author: Ryann Cairns
Documentation of income and assets is a big part of the traditional process of applying for a loan. However, there are those borrowers who do not have the traditional income documentation required for the loan approval process. These borrowers include people like consultants, independent contractors, business owners and certain sales professionals.
These borrowers often do not get regular paychecks, and therefore are unable to produce copies of checks or pay stubs to show to potential lenders. It is still possible for those lacking income and asset documentation to borrow the money they need, however. A growing number of bankers and other lenders are focusing on this important part of the loan market. There are a growing number of quick loan and fast cash outlets that allow those without documentation to obtain the loans they need.
It is important for any potential borrowers to fully understand the terms and conditions of these no documentation loans, however. These no documentation loans often come with strict repayment terms and stiff penalties for late payments. It is vital to read all the fine print on the loan documents before signing any loan paperwork.
Just as important as understanding the terms and conditions of the loan is understanding the annual percentage rate (APR) of the loan. The interest rates on no documentation loans are often many times the interest rates on traditional loans, so it is vital to understand the annual percentage rate and the loan term before signing.
The lender is required by law to disclose the annual percentage rate of any loan products they offer, but such APR disclosures are often buried deep in the fine print. Again, it is important to read the fine print carefully and understand the loan terms before signing anything.
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