Glossary
Alt-doc loan
Also called: low-doc loan, alternative documentation
An alt-doc or low-doc loan is assessed using alternative evidence of income, such as business activity statements or an accountant's letter, instead of full tax returns. It is often used by self-employed borrowers.
An example
A sole trader who has recently grown their business provides bank statements and activity statements to a lender, because their latest tax return does not reflect current income.
Why it matters
Alt-doc loans can widen access to finance but may come with different pricing and conditions. If the loan is regulated, responsible lending obligations still apply.
Points to check
Ask which documents the lender will accept in place of tax returns, and whether an accountant's declaration must come from a registered tax agent. Check whether the rate, fees or maximum loan size differ from a full-documentation loan, and whether the lender reviews the loan once tax returns are lodged. Confirm whether the loan is regulated consumer credit, because responsible lending obligations still apply to regulated loans even when income evidence is alternative. Keep copies of everything you provide.
Read about low-doc and non-conforming loans