Loan ID and document checklist
If you’re looking for a big loan, like a mortgage or a car loan, you will need a lot of documentation when you apply. Some loans such as low doc or no doc loans are available, but these are reserved for special cases. Read our blog on those types of loans, here. Here’s a checklist of all the common documents you typically need when applying for a loan.
Personal identification and points
You may have heard of the term “100 points of ID” or in some cases, “300 points of ID.” This was set up in 1988 under the Financial Transaction Reports Act making sure customers and banks are protected against identity fraud and are held accountable.
Basically different identity documents are given a number of points based on how well the document proves your identity. For example, a birth certificate is issued at your birth and witnessed by many people. This verifies your identity much better than a phone bill or a credit card.
Primary documents such as a birth certificate, passport or citizenship certificate usually carry 70 points. Documents with a photo and a name attached such as drivers’ licences are given 40 points. The less information a document has the fewer points it gets. Here is the breakdown:
• Primary document (passport etc.) = 70 points
• Secondary document: document with a photograph and name (drivers licences etc.) = 40 points
• Official document with name and address (rates notice, land title, mortgage papers etc.) = 35 points
• Document with name and signature (Credit card, Medicare card, EFTPOS card) = 25 points
• Document with name and address (utility bill, bank statement, electoral roll, lease agreement) = 20 points
• Document with name and date of birth (Trade union card, educational institution card) = 25 points
Sometimes you will need to bring in or send off what are known as certified copies.
What “certified copies” means
A certified copy of a primary or secondary document is copies of your documents sighted by an official. They can verify that these are true copies of the original documents. They usually write on the copied document, holding it up to the original. Then they sign it with their name or a special stamp.
Here are is a partial list of people who are authorised to certify documents:
• Health practitioners (nurses, doctors, dentists, pharmacists)
• Legal practitioners (lawyers, attorneys)
• A person on the roll of the Supreme Court or High Court designated a legal practitioner
• An officer or authorised representative of an Australian Financial Services Licencee with two or more years of continuous service
There’s also a long list of people who can certify documents such as teachers, public servants and other professionals. Check here, as you may know someone in these organisations who can help.
Before approving a loan, a bank or lender will likely want to see proof of income. These may be payslips that show the lender how much you have earned in the last three or six months, or your most recent tax return. You may also want to bring in a signed letter from your employer confirming your employment status. You should also bring in your bank statements from all your accounts proving you have savings.
Other helpful documents
Other helpful documents you may want to produce are lists of assets and liabilities, shareholding statements and statements from rental income. Documents, such as a landlord reference, prove you have a stable residential history and that you’re a low risk to lenders. Better yet, you may want to show lenders you have current insurance policies such as home and contents, life insurance or income protection insurance. It all helps when trying to get a big loan.