Most of the online loans will require you to provide proof of your income and employment. It is important that you don’t lie about your income and employment on the loan application because the lender will check it. The lender usually will verify this information prior to the closing date of the loan.
The lender will attempt to make a phone call to your employer and find out whether you really work there and the salary that you receive. Sometimes, the lender will not call the employer to obtain the information. Instead, they simply require the employer to forward the information to a fax machine. Many online lenders also require the applicants to show proof of the pay stub.
The pay stub proof is submitted by applicants who are working with an employer. If you are self-employed, you need to produce proof of an income tax return for at least one year. They may also want you to provide a copy of your business registration license. There can be obstacles when you are trying to get your employment verified. For example, the human resource department in the company you are working can be slow in completing the verification. Some lenders use software to verify the employment of the applicants. If the information your employer provides is different than the information you enter in the application form, the lender will prefer to use the information your employer provided.
Lenders want to know important employment information for example when you start the job. If you are on a job contract, they will want to know the termination date. You will have to provide information about your employers such as employer’s name, phone number and office address so that the lender can quickly obtain your employment information.
Differences in the income information you provide and the income information your employer provide can result in a higher cost for the loan such as higher interest rate and lesser borrowing power. Lenders want to approve loan application of applicants who are likely to remain on their job for 3 – 5 years. They will check to see if you have lost your job recently or that you constantly change your job. It is likely that the lender will not approve the loan if the employer foresees that you will quit your job in the near future.
Self-employed applicants are required to fill in the IRS Form 4506-T. You must attach a copy of the IRS tax return for the past year along with the form. The lender can also go ahead to verify the information with your accountant. Before they approve the loan, they also want to know how long your business will continue to stay successful.