No Income Proof Loans
More often than not, lenders and banks require borrowers to prove a source of income to borrow a loan, regardless of its amount. But what about self-employed individuals? Today, business owners and freelancers are on the rise, which is why no income proof loans came about to cater to individuals who have a source of income, but not the traditional one.
So, if you’ve been hopelessly searching for a loan that won’t require you to submit proof of income, keep reading to find out all about no income proof loans.
What Are No Income Proof Loans?
No income proof loans are those that don’t require proof of income to be borrowed. Instead, they simply require proof of your capability to repay the loan amount with no fixed employment earnings.
With these loans with no credit check, your income source doesn’t have to be traditional – it can be a liquid asset like cash reserves or pension or collateral like land, cars, property, and similar. However, liquid assets are preferable to be sold rapidly if you default on the 10k loan no credit check. Below are some of the most common income types used:
- Pension/retirement accounts
- Unemployment benefits
- Child support
- Business startups
- Freelancing jobs
- Royalty payments
- Partner’s income source
- Divided payment
- Investment incomes
- Social Security benefits
- Government bonds
- Houses/real estate
- Jewellery (gold or diamond)
- Veterans Administration (VA) benefits
Types of No Income Proof Loans:
No income proof loans come in several types, each with its eligibility criteria. The most common three types are Stated Income Verified Assets (SIVA), No Income Verified Assets (NIVA), and No Income No Assets (NINA).
Stated Income Verified Assets (SIVA) loans are those that allow you to specify your monthly income without having to verify it precisely. However, that doesn’t mean that your assets and credit scores aren’t considered. In fact, any assets you claim to have must be verified, and you must have a good credit score.
In other words, you simply say how much income you generate per month and based on that figure, you’re qualified for a particular loan amount range. With this loan type, borrowers usually have an income but not one that qualifies them for a loan, so the larger weight is put on the verified assets as collateral.
No Income Verified Assets (NIVA) loans require you to be neither employed nor have a stable income. With this loan type, borrowers genuinely don’t have a traditional income source and ultimately depend on their assets. So, the lender verifies the assets’ worth, and based on their value, the loan amount either gets approved or rejected.
NIVA is the most popular no income proof loan type because most self-employed individuals meet its criteria.
No Income No Assets (NINA) loans are most commonly sought out by real estate investors with rental income as their primary income source. Simply, the borrower provides proof of sufficient rental earnings to cover the loan amount, and the borrower assesses the application regularly.
However, NINA loans tend to come with the highest interest rates due to the lack of verification for both assets and income, making these loans exceedingly risky for lenders.
How Do No Income Loans Work?
When these loans get serious, they don’t really differ from the standard loan types. The vital part of the application is to prove that you’ll be able to repay the loan in due time, and that’s established by verifying your assets, for the most part.
It’s also worth mentioning that the approval process doesn’t only include ensuring that the loan’s principal amount will be repaid; it also involves assessing whether you’ll be able to pay back the interest too. Many people tend to neglect this point and only factor in the principal amount while providing proof of their assets or collateral, leading to the application’s rejection.
Remember, at the end of the day, lenders only need to see that they won’t need to pay an extra penny out of their pockets after the loan term is over. With that in mind, they’ll also want to check your credit history, bank accounts and transactions, and general financial stability. The more you’re able to prove that stability, the higher your chances of getting the loan approved.
How to Compare No Income Proof Loans
When you’re choosing a lender, it’s crucial to take the time to compare the available options in Australia. And as you do so, you need to keep in mind a couple of factors, the most important being the interest rate. Believe it or not, a high interest rate can add thousands of dollars to the loan’s principal amount, and no one would want that.
Given that most loans no paperwork instant cash have high interest rates anyway, try to land yourself the best deal. It’ll take time, but it’s worth it. At Perfect Payday, we can help match you with the best lenders, so reach out if you need help with that!
Then, other than the interest rate, never neglect to consider other fees and expenses. An excellent place to start is to look at the comparison rate to get an idea of the loan’s total cost, including both the interest rate and the fees.
Loan amounts are also worth taking a look at. While you probably have your mindset on a specific amount, you’ll find that due to these loans’ risky nature, it’s common not to find a lender to give you the amount you have in mind. For that, consider the different options to ensure you get the amount you’re planning for and need!
Following that, repayment frequency is an essential factor to consider. You’ll likely have the option of paying weekly, fortnightly, or monthly, so make sure the lender offers your preference to prevent the situation of having to make frequent payments you didn’t sign up for.
Finally, check whether the lender offers any extra features. For instance, some lenders won’t charge you if you make an early repayment for the full amount; others offer an offset facility to reduce the interest rate, and similar. As we said, land the best deal you can get!
The Disadvantages of a No Income Proof Loan
Like all loans, no income proof loans aren’t all rainbows and butterflies; they also come with a set of disadvantages, including:
- High interest rates
- Restricted/capped loan amounts, even with the presence of a cosigner
- Short repayment periods (usually months, rarely years)
- Higher establishment fees and ongoing fees
The main reason behind these exorbitant fees is that the loans pose a high risk to the lender. Therefore, they want to ensure that they’ll get the maximum amount of money possible in the shortest possible time. Accordingly, you want to consider all your options before deciding to opt for a no income proof loan.
Since you have a non-traditional income, you’re eligible for a non-traditional loan! No income proof loans are there to the rescue when you’re in dire need of a loan but can’t conform to the usual standards. All you need to do is have your collateral or assets prepared and finalize their paperwork to present as proof that you’re capable of making repayments.
But as a reminder, only resort to these loans when it’s absolutely necessary, and you have no other options. That’s ultimately due to the high costs involved in the process, which is why alternatives might be more beneficial.
Yet, after all, we’re all in favour of the existence of these loans – they certainly make for financial accessibility to everyone, and that’s essential in this time and day!