No Doc Loans are loans than require less paperwork than Low Doc Loans.
There is no such thing as a completely No Doc Loan.
No Doc Loans are generally loans that are in a company name that are not regulated by the NCCP.
They still require documentation and an indication as to how a loan is to be repaid.
As a guide, instead of an accountants letters and, or BAS, documentation may take the form of a completed application form outlining assets and liabilities and bank statements of all loans evidencing ability to repay a loan.
What lending is regulated under the National Credit Code?
How is it determined if a particular loan will be “regulated” or “non-regulated” under the National Credit Code (NCC)?
Section 5 of the NCC details the credit to which the NCC applies, while Section 6 details the credit to
which the NCC does not apply.
As a guide and guide only, there are two main tests.
Is a borrower an individual (or a group of individuals) or a strata corporation?
Yes, then the loan may be regulated under NCCP (see purpose)
No, then the credit is not regulated. ie if the borrower is a company, a loan is not regulated under NCCP.
Is the credit is wholly or predominantly (> 50%) for:
a. Personal, domestic or household purposes? or
b. for purchasing, renovating or improving residential property for investment purposes?
c. or for refinancing credit that was provided wholly or predominantly (> 50%) for the purchase, renovation or improvement of residential property for investment purposes?
If any of the answers to (a), (b) and (c) are “yes “, then the loan is regulated.