How Do Payday Lenders Verify Employment?
Many loan applicants wonder why payday lenders verify employment. The simple reason is that for short term loans, like installment and payday loans, the most reliable indicator for lenders is your income. It assures them that you will repay your loan. So, verifying you are employed and earning a regular income is critical to approving someone for a loan.
Verifying Your Employment Status
The process is not as simple as calling your employer. To meet government regulations, the call to your employer must be on a phone number verified by an independent third party, for example, Google. This verification is always done to avoid fraudulent applications.
If you work for a small company, then sometimes it is difficult to verify the employer phone number you have provided, as it may require using several information sources to complete. Of course, any call to your employer is done without any involvement of an applicant. If your potential lender tells you, “we are working to verify your employment,” then you know why this is occurring.
Why do payday loan providers ask for employment details?
As noted above, the best indicator of someone’s ability to repay a payday or installment loan is their employment status and income. Lenders can not loan to someone without some source of verifiable income, even if it is a disability or social security income.
Can payday loan companies contact your employer?
Yes, when you request for a payday loan online and provide your employer’s information, including their phone number, you are allowing them to contact the employer and verify your status with them. This includes how long you have been employed and your average monthly earnings.
How do I know if a lender will contact my employer?
Your employer may tell you that someone called to verify your employment, but this may not happen. Your lender will tell you if you ask, but you should assume this has happened as it is an essential part of the approval process.
I don’t want my employer to know that I’m getting a payday loan. What are my options?
Some direct payday lenders will allow you to verify your employment income in another way without contacting your employer directly. This is usually done through banking records. For example, if you have direct deposit for your paychecks, you can show these from your bank records to your potential lender.
If not, remember that a lender is calling to verify you work where you say you do and what you earn. If asked what the purpose is, they will say you have applied for a loan but not what type of loan or for what purpose. So, it may not be an issue for you. Also, you can ask your direct payday lender if contacting employers is their company policy before you request for a payday loan.
My employment situation has changed, and I don’t want the lender to know. What can I do?
It is best to let your lender know if your job status has changed or you changed jobs. But this is not necessary if you have already received your loan. Lenders cannot contact your employer after lending to you to verify your employment status. If you are still in the approval process, then you should contact your lender right away.
Keep in mind that the approval process for a payday loan is very, very short. Often it takes just minutes to complete, so it is highly unlikely your status will change during that time.
What can a borrower do if a payday loan company illegally contacts their employer?
It is not illegal for a lender to contact your employer if you applied for a loan. If you did not apply, you should immediately let your employer know that you have not done so and that the call may be an illegal lender or scam. Either way, it is good to let your employer know. They can report the phone number that was used to contact them to the authorities.
We have helped over 500,000 people who have requested payday loans over more than 10 years, so you know we are a trusted resource for a short term cash loan.
Apply online for an affordable payday loan with CashOne today!
Comments are closed
