How Personal Loan Lenders Use Employment History as a Qualification for Loan Approval

The majority of the lenders will want to see your employment history in order to determine whether you are financial stable enough to apply for the personal loan. The lender wants to know how much is your salary every month. They also want to know the start employment date as well as the termination date if you work on a contract.

You are responsible in gathering all the information about your employment including name of employer, telephone number, pay stubs and company address. You have to fax copies of the document over the fax machine. In this way, the lender can conveniently study these information and quickly get your loan approved.

Usually, the lender will make a phone call to the human resources department of your company to verify that the employment information you provide is correct. Some lenders just want your company to confirm the employment information through fax. Your loan application can be delayed if the human resources department is slow and not promptly sending in the employment information that is required.

If the information that your employer provide is different than the information you enter in the loan request form, there is a possibility that the lender will reject your loan application. The lender will confirm with your employer to ensure that you will continue the job in the future for at least 3 years. The lender can deny your loan if they foresee that you will be losing your job. If you constantly change jobs every now and then, it could also affect your loan application. It is best to stick to the same job for the past 1 – 2 years if you want your application for the personal loan to be easily approved.

Self employed people must be able to show proof of their business license. You will be required to fill in the Request for Transcript Tax Return form, which is the IRS Form 4506-T. They will want to review your CPA to determine how long your business will continue to be successful. Through reviewing the CPA, the lender will learn about how much profits your business make and the income you have from investment properties. Your employment information is used in determining the interest rate of the loan.

It is important that you never lie about your employment information with the lender.
There is no use lying because the lender will carry out research to verify the information in the loan application. If you lie about your employment, you could end up on the blacklist and have problems in obtaining loan in the future. You want to make sure that you can afford in repaying the loan so don’t give false information about your employment status on the loan application.

Author: Don

Covering the financial markets since 2005. Love to learn and share ideas and tips. The best articles come from ideas presented by users of this website. Topics that we find interesting include personal finance, credit cards (especially awesome balance transfer and rewards cards), small business financing and loans for debt consolidation.