A low doc car loan is a type of commercial car finance tailored for applicants who can’t provide the usual full financial documentation – typically self-employed individuals, sole traders or business owners with non-traditional income verification.
Functionally the same as a chattel mortgage loan, the loan is secured against the car and requires that it be used at least 51% for business purposes, with various tax benefits available. You can purchase any type of vehicle with a low doc car loan, with loan terms generally ranging from one to seven years. In some cases, a balloon payment may be applied at the end of the loan to reduce your ongoing repayments. However, because there’s less documentation available, lenders generally view low doc car loans as higher risk. This can lead to stricter borrowing limits, shorter loan terms and higher interest rates.
If you’re a business owner who needs a vehicle for commercial use but doesn’t have two full years of tax returns, Savvy can help. We work with a broad panel of lending partners, including specialists in low doc finance, to find the most cost-effective deal – even if you're applying with alternative documentation.
Why apply for a car loan with Savvy?
Low doc car loans pros and cons
Pros
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Flexible eligibility requirements
Low doc car loans give those who may not qualify for standard business car finance the opportunity to purchase a vehicle.
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Faster application process
Because you’re supplying fewer documents, the approval process can be quicker than for a full doc loan.
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Potential tax benefits
You may be able to claim for GST on the purchase price, depreciation of the car and interest on the business-use portion of the loan.
Cons
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Higher interest rates
With fewer financial documents to assess, lenders see low doc loans as higher risk, which typically means you’ll pay a higher interest rate compared to full doc finance.
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More restrictive loan terms
Lenders may limit how much you can borrow and how long you can take to repay the loan, which could affect cash flow or the type of vehicle you can afford.
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Fewer lender options
Not all lenders offer low doc car loans, which can reduce your borrowing choices.
Low doc car loan eligibility
Low doc car loans are suited to applicants who need a business vehicle but may not have conventional documentation, such as:
- Self-employed workers without up-to-date tax returns or detailed financial records
- Startups still establishing a financial track record
- Small business owners with seasonal or irregular income
Lenders will assess your application based on how long you've been operating, your business structure and your capacity to repay the loan. While individual criteria vary, most lenders will expect:
- An active ABN or ACN for at least 12 months
- GST registration, especially if your turnover exceeds $75,000
- Evidence of consistent business income, even if shown through alternative documents
- Australian citizenship or permanent residency
Being asset-backed – such as owning a home or commercial property – can help you access more favourable terms. Likewise, a good credit history can lead to lower interest rates and more flexible loan options.
If you want an idea of what your repayments might look like based on your estimated loan amount, interest rate and term, you can use our car loan calculator.
The documents you’ll need for a low doc car loan
While you won’t need full tax returns, lenders will still ask for alternative documents to verify your income and business activity. These may include:
- A signed declaration of your business income or a letter from your accountant confirming your projected income
- Business bank statements
- Business Activity Statements (BAS)
- Proof of ABN or ACN registration
- Details about your business, its activities and how revenue is earned
- Information about your current assets, liabilities and other ongoing expenses
Additionally, you’ll need to complete application and privacy consent forms, as well as provide proof of ID like your driver’s licence and/or passport.
Even if you don't meet all the above, these can be assessed on a case-by-case basis and approvals are still possible in some situations. You can apply to speak with a Savvy consultant about your situation if you're unsure and want to know more about your options.
The difference between low doc and no doc loans
While the terms ‘low doc’ and ‘no doc’ are sometimes used interchangeably, they’re not the same – and true no doc car loans are extremely rare.
Low doc car loans require minimal financial documentation and are designed for self-employed borrowers or business owners who may not have traditional financial records on hand but can still demonstrate their ability to repay the loan.
No doc loans, on the other hand, imply no proof of income or financial documents at all, which poses significant risk to lenders. Because of the risk, these loans carry much higher interest rates and may have strict conditions attached, such as:
- Being asset-backed (e.g. owning property)
- Providing a substantial deposit
- Having a strong credit history
In practice, most loans advertised as ‘no doc’ are in fact low doc loans. If you see a loan marketed as ‘no doc’, it’s best to treat it as a low doc loan with non-standard documentation requirements. If you’re unsure, a finance broker can help clarify what’s genuinely available and what’s needed to qualify.
How is your car usage measured on a low doc loan?
Because a low doc car loan is a type of business finance, the vehicle must be used at least 51% for business purposes. While lenders typically don’t track your vehicle usage day to day, you are expected to ensure it meets this threshold.
Usage is largely based on your own record-keeping. This is especially important for claiming tax deductions as you can only claim expenses that relate to the business use portion of the vehicle. To stay compliant with the ATO and your loan terms, you should keep accurate records that include:
- Distances travelled for business and personal use
- Logbooks or digital tracking tools showing trip purposes
- Fuel and maintenance receipts, linked to business use
- A clear separation between business and private travel
Keeping detailed records make it easier to verify business use and ensures you're prepared when tax time rolls around.
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