Payday loans are a useful option if you are running low on cash. These loans enable people to take a cash advance from an upcoming paycheck. The loan amount is not huge, the repayment term is short, and the qualification is easy. So, if you are in an emergency, a payday loan is your best savior. Although getting a payday loan is a swift process, the paperwork could become a headache if the employment verification process doesn’t go smooth. The employment verification for payday loans process has a few tricky facets that might delay the process if you are unaware of it. Here, we walk you through the complete process of employment verification for payday loans. So, you can cruise through all the formalities and get the money quickly.
- 1 What is the complete process of obtaining a payday loan?
- 2 During what step does the lender check my employment details?
- 3 What are the documents I need to submit for employment verification?
- 4 What documents will the lender ask if I am self-employed?
- 5 Tips for completing the employment verification process quickly
What is the complete process of obtaining a payday loan?
Generally, the process of obtaining a payday loan has three steps:
- Lender processing the loan application: In the first step, the lender checks the applicant’s data within internal databases. The check is for customers that are returning or who have been on the blacklist for such instances.
- The lender evaluates and verifies the application: Once the lender has checked and verified the applicant’s data, they evaluate the application using various checks such as personally identifiable information, income verification, credit checks, know your customer checks (KYC), and other similar compliance checks.
- The lender takes a call on funding: In the last phase, the lender decides whether to fund the applicant or not.
During what step does the lender check my employment details?
In most cases, the lenders check your employment details during the first and the second step. Checking the loan applicant’s employment details is a part of the loan application processing step and loan application verification step.
What are the documents I need to submit for employment verification?
Lenders want to know whether you can repay the loan or it. Hence, they check your income generation details. It involves scrutinizing your employment details like employment ID, salary details, and income tax fillings.
The mandatory documents for submitting a payday loan application include two passport-sized photographs, KYC documents, proof of employment, proof of income, and other relevant documents.
Once you submit the documents, the lenders will check your credit score by verifying your traditional credit report with three main credit bureau companies. Some companies might send their representative or professional notary to your home to scrutinize the details.
For salaried employees, the lenders may ask for the following documents:
- Proof of employment from the current employer.
- Your income returns and the Form 16 of the last two years.
- The salary slips of the last of the previous six months.
What documents will the lender ask if I am self-employed?
The loan application doesn’t change much if you are a self-employed person. You will only need to submit some additional documents such as:
- Income tax return for the last two years.
- Profit and loss statements, Balance sheets, and other such financial statements.
Tips for completing the employment verification process quickly
We should understand that lenders are in the business of lending money. So they want to lend money to as many people as possible. They carry out the paperwork and application verification process to weed out the fraudsters. So, if you are a genuine borrower, you shouldn’t be worried about the employment verification process.
To ensure there are no hassles afterward, keep all your documents in place and update them accordingly.
Another way to improve the application process speed is to check with the lender the format in which they need the employment verification documents. So you should ensure your documents are in the correct format as this will save time for both sides.