The White Lies Which Will Blacken Your Loan Application
Even if you’ve done everything possible to stay on top with money, there may come a time when you face taking out a loan.
Even something as fundamental as buying a house requires a hefty mortgage which, in itself, is a kind of loan.
That’s part of the reason around 80% of Americans are now facing a debt of some sort.
You could say that things on the loan front are getting a little out of control.
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If you’ve never been in money trouble before, though, a loan application can be daunting.
Suddenly, you’ll need to call on information you would never have thought relevant.
In many ways, loan screening is all about checking if you’re a viable option.
When that piece of paper is in front of you, though, it’s not unusual to panic and tell a few white lies. You need that money, right?
Plus, you probably figure that the chances of the company checking those things are small.
Studies suggest that around 1 in 4 people take this risk. Sadly, 86% of them are found out.
The fact is that lying on an application is a form of fraud.
At the very least, you won’t be approved due to your dishonesty.
If facts like these come out after your acceptance, you could find yourself in legal hot water. And, that can have severe repercussions.
Before you make this mistake, then, consider the most common loan lies which you don’t want to tell.
The Earning Exaggeration
Many people panic and add at least something to their annual incomes during applications.
Most assume that the loan company won’t call their employer to check.
Obviously, something like a mortgage is a different matter. For that amount of money, a bank will need to do checks like these.
But, for a smaller loan of a few grand, the chances are that they’ll take you at your word.
The trouble is that lying about income is about the worst idea you could have. That’s because the loan amount is often decided based off how much you earn. By lying here, you’re agreeing to an amount you stand no chance at paying back.
And, that’s sure to come back and bite you.
As soon as you start missing payments, your debt will begin spiraling out of control.
To make matters worse, lying on your application means you may not even be able to file for bankruptcy.
That’s because lies can leave you with a nondischargeable debt if they come out, and you can bet they will. Then, you would have to look for lawyers who deal with bankruptcy court claims to fight your corner.
This can be a painful process, and there’s still no guarantee you’ll be able to clear your name. All because you added a few grand to your income.
Think twice, then, and turn to your pay packets to get a more accurate figure.
‘Yes, Of Course I Have A Job.’
This fib has many of the same implications as those earning exaggerations, but so much worse.
Even if you have ample savings in the bank, you’re going to struggle to pay back a loan with no more money coming in.
That’s the primary reason why lenders don’t look twice at unemployed individuals.
Even if they don’t check the truth of your claims upfront, something like this will soon come out. And, when it does, you’re the one who’s going to be out of pocket.
Even worse, you may then struggle to get a job in the future because of issues with debt or legal proceedings.
That makes this a vicious cycle which you want to avoid at all costs.
Many people also opt to tell a little lie about their marital status on their loan applications.
This is because married couples get different kinds of financial help, such as various tax breaks.
The strength of two incomes is also a far more appealing prospect than one. And, let’s be honest; no bank is going to ask for your marriage certificate.
Still, a lie like this is one of the easiest to catch you out on.
That’s because it involves creating a whole person who doesn’t exist. At some stage, the bank manager is going to want to meet your imagined spouse. If nothing else, they’ll need to sign paperwork and the like. And, that’s sure to get pretty awkward pretty fast.
To add insult to injury, a lie like this isn’t all that white.
It’s actually a severe case of fraud which could even see you doing time behind bars.
So, tick the ‘single’ box already, and move on with your day.
Age Is Definitely An Issue
Many loan application lies also involve age.
Often, an applicant will say that they’re older than they are.
This is probably because we assume that a bank will see us as more trustworthy the older we are. And, there is some truth to that. A middle-aged applicant with a clean financial history is sure to be more appealing than someone in their early twenties.
Again, though, there’s little chance of your getting away with something like this.
The majority of loan applications require identification at some stage. The bad news is that every form of ID has your date of birth clearly stated on it.
As such, you can guarantee that this lie will unravel before you’re accepted.
Rather than taking a punt on your actual age, then, this will ensure that you don’t get anywhere near that money.
While legal action is unlikely given that you won’t have taken that money, this will see you blacklisted by near enough every other loan company. And, that could see you struggling to get by for the rest of your life.
All because you chose to add five pointless years onto that application. It hardly seems worth it, does it?
Have you ever lied on a loan application? What happened? Comment below!
[a contributed post]