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Wednesday, September 2, 2009

No Doc Loans and Their Convenience

Getting a loan sanctioned has become a much harder task with the vast amount of documentation that's required from most financial institutions. Minor financial issues from your past or losing one of those many documents can lead to a disapproved loan. Then there is the time issue. It can take up to months for a bank in order to properly examine a traditional loan application. Many customers shy away from loans, just because of the high level of documentation that they have to produce in order to apply for them. Some even think that giving a detailed account of their personal life for a loan is risky. Guess what? There is a way to work around all that. Several financial institutions have come up with a new form of loans, commonly known as no doc loans or no documentation loans. They offer customers the ease of less paperwork, and only ask for slightly higher interest rate in return.

If you don't have all the necessary paperwork to qualify for a regular loan or if you just need to get a particular loan sanctioned due to a sudden emergency, then no doc loans are your solution. With no doc loans, you need minimum paperwork and the processing time is greatly reduced. Most of the times, financial institutions just look for proof of income and residence in order to start processing no doc loans. There is no need for any additional documentation.

However, it's not all nice and sweet. The ease of no doc loans comes at a price - higher interest rates. It is basically a good option for those customers that can afford to pay the higher rate of interest and need the loan approved promptly. You must assess the advantages and disadvantages carefully before making your decision.

If the high interest rate seems like too much of a turn off for you, think again. How many times have you wished for those few extra cash in order to get a great deal? There are emergencies, like a dream home going for sale with a deadline that's approaching. No doc loans would be the way to go in such a scenario.

The bottom line is that if time is pressuring you and you need a quick loan for any reason, then no doc loans are your best option out there.


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