Specialist Loan

A specialist loan refer to loans whereby you have some sort of bad credit history which prevents you from being accepted by a mainstream bank. Specialist loans are also known as Alt Doc or Lo Doc loans, and have other unique names like ‘refresh’, ‘reset’ or ‘recharge’.

This is because they fill a need which is not provided by mainstream banks. It is interesting to note though that the sources of funds of specialist lenders are provided by the big four banks (CBA, Wesptac, NAB, ANZ) as well as many large multinational banks.

• Your latest financials are not ready by the time of application; 
• You earn a high income but have legally reduced the profitability of your business to reduce your tax bill; 
• You have a credit impairment that is preventing you from borrowing from a mainstream bank

• Keep an open mind as to alternative loan options 
• Focus on whether you can afford the repayments every month rather than the interest rate 
• Show the documentation requested by your specific lenders policies (we will advise) 
• Have a supportive accountant who is willing to confirm your income declaration 
• Demonstrate good financial conduct before and after you obtain the loan 

Accurately explain your situation to us so we can position to the bank in a way that will make sure your loan gets approved

• Arrears or missed loan repayments, including credit cards 
• Defaults on bills such as phone bills, utility bills, council and strata bills 
• Court judgements or bankruptcy filings in your name, or a company you were a director of 

These items can be identified on a Credit Check Report which we run for most self-employed clients, or those who indicate that they may have a bad credit history.

• Purchasing a home or investment property
• Conducting renovations
• Investing in shares or other assets
• Purchasing a motor vehicle
• Consolidating other loans to make your repayments more manageable

This income is then used for servicing as long as your accountant is willing to confirm this in a corresponding verification document and the rest of your application meets the lender’s policy criteria.

Usually this statement will match identically the income you have declared or, at a minimum, advise that you can afford the loan repayments.

The letter will also advise the number of years they have been your accountant, their professional membership and that there are no conflicts of interest in making the declaration.

This fee is usually 1.0 – 1.5% of the loan amount and can be labelled as a ‘risk fee’. Some lenders will allow this fee to be capitalised (i.e. added) to the loan so that you do not need to pay the risk fee out of pocket.

You accountant may be called to verify the same. Apart from this, the loan process is mostly the same as any other full document loan application.

As long as can demonstrate (1) good conduct on your loan; (2) your credit file has been remediated; and (3) the income required to service the loan under standard full-doc requirements, you will be able to refinance your loan back to a mainstream lender.

• LVR – the worse the credit impairment, the lower the allowable LVR by the lender. This is to allow the lender to manage the risk of the loan.; and 
• Loan purpose – normally a specialist loan cannot be used for construction or to purchase vacant land. Postcode restrictions may also apply where the lender will only accept properties in metro postcodes or in towns with a minimum population.