In case you need to obtain a loan, it’s vital that you look for a reliable lender near you who is willing to offer you the loan fast, but before doing so, one should make sure they have relevant documents meant to act as proof they have a source of income. Many people don’t understand the importance of having proof of income when applying for a loan, and in this guide, we are going to help you discover more about these documents and reasons why you should have them. Even online lenders who have set up websites require that you offer proof you are employed and in a position to repay the loan. The main reasons why lenders require proof of income is to be certain they will get a return on their investment. This website is dedicated to make sure you know more about loans and to help you manage your finances first; and in this guide, we will focus on documents that act as proof of income when obtaining a loan.
One should make sure they have their recent pay stubs in order. If you are in urgent need of a loan and looking for a way to prove you have an income, make sure you present your pay stubs. No lending institution will deny you a loan as long as you present a pay stub as this is proof you have a steady source of income and in a position to make periodical repayments. However, if you are not employed, this should not be a concern as there are other documents one can use to prove they have an income. The second document one should present when obtaining a loan is a bank statement. Having a bank statement at hand is proof that you have a source of income and increases the lenders confidence in offering you the loan. Money that has been deposited in your account is reflected in your account, and this is visible in your bank statement. Simply ask your bank to print one for you when you are going to apply for a loan. Bank statements are easy to obtain, and you only need to print it and provide it to the lender.
The other document one can present to prove they are employed is a letter from your employer. Look for a recommendation letter from your employer if you cannot get your hands on your pay stubs or a bank statement. Your employer will happily write you this letter on request, and once the letter is ready, one should present it to the lender and get the loan.
Individuals that are self-employed and in need of a loan can create documents that will act as proof of income. Talk to the lender before you create the document to be sure you understand what they accept to avoid wasting your precious time.
Source: explanation