No Document Loans
There are many times where it is either difficult or impossible for a potential borrower to show a lender their income on paper. During these cases a borrower may only be required to show an operating license or business license to prove there income information. This type of financing is recommended for people who are either self-employed or whom have difficulty revealing their income.
Loans that do not require borrowers to provide documentation of their income to lenders or do not require much documentation are called No-Doc or Low-Doc loans (no income, no asset, no fico). This is a flexible financing solutions for anyone without the usual paperwork like financial statements at the time of application.
A loan with few to no documentation or credit history requirements is easier to qualify for, but generally carries a significantly higher interest rate. Private money is the main source of no doc loans, often with interest rates charged at 2% to 6% per month (24% to 72% p.a.). Non-conforming lenders focus on the lower risk no doc loans and offer more competitive interest rates. With either lender type the term of the loan is usually six to twelve months and often has expensive fees or a high interest rate for extending the loan.