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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Lying on a loan application may seem harmless at first — after all, a lender may not even check your inflated income claim or current employment status. However, intentionally lying on a personal loan application is considered fraud, and it can have real consequences. Below we’ll cover how lenders verify the information you submit with your personal loan application and what can happen if you intentionally falsify documents or other information. Get pre-qualified
What information do loan companies verify on their applications
When you fill out a loan application, you’ll be asked to provide your salary and employer information. , you also may be asked to provide pay stubs, tax returns or bank statements, but that doesn’t always happen. For example, online lender says that it verifies employment, income or both on about 61 percent of its loans. The firm cautions investors against relying on self-reported information when making investment decisions. “Applicants supply a variety of information regarding the purpose of the loan, income, occupation, and employment status that is included in borrower listings,” the company writes in its . “We do not verify the majority of this information, which may be incomplete, inaccurate or intentionally false.” For many lenders, verification could be triggered: Based on information on the credit profile or application. When conflicting or unusual information is found in the application, like a stated income that appears inflated relative to the stated job title. When fraud is suspected. However, while it might be tempting to lie on a personal loan application given that information is not always verified, it is strongly discouraged. You could face serious legal consequences and make it harder to take out a loan down the road. What happens if someone lies on a personal loan application
Knowingly providing false information on a loan application is considered lying and is a crime. For instance, putting an incorrect salary or falsifying documents would qualify as lying — and can impact you in serious ways. An example: In 2016, the Michigan attorney general’s office filed criminal charges against a state representative accusing him of producing fake income statements when he applied for a personal loan in 2010. Rep. Brian Banks was charged with two counts of uttering and publishing false information and two counts of using “a false pretense” to get the $3,000 loan from Detroit Metropolitan Credit Union. The most serious of the charges carries a prison term of 14 years upon conviction. Common lies on a loan application
When people do lie on their loan applications, they often use one of these untruths: Exaggerated income: Income is one area that’s commonly misrepresented, with applicants inflating their annual income in order to qualify for a loan or to get a higher loan or better rate. Not reporting debt: In addition to your income, lenders need to know how much debt you have so they can determine whether the burden of an additional loan is reasonable or not. False employment: Applicants may claim to have one or multiple false jobs in order to make themselves appear more financially stable than they really are. Inaccurate residency: One requirement of most loans is proof of U.S. citizenship or residency, and some applicants who are unable to meet this requirement may still try to claim residency anyway. Misrepresented purpose: There are often requirements regarding how a loan may be used. For example, you cannot use a student loan to pay for a new car. Undervaluing assets: In order to qualify for a lower rate, some borrowers may not report all of their assets. Any of these lies and more are subject to penalty by law. Risks of lying on personal loan application
Going to prison for lying on an application is rare, but it does happen. For instance, a North Carolina woman was in 2015 after she pleaded guilty to providing false information regarding her income and assets to obtain personal loans. Prosecutors allege she used the money to help finance a $1.85 million home. In 2014, an Ohio woman was for using other people’s identities to take out loans at LendingClub and other institutions. If you lie on your loan, you could also lose your loan. Prosper says that 11 percent of the applications it verifies contain false or insufficient employment or income information. In those cases, the company cancels the loan before it is funded. With other companies, you may have to immediately repay loan funds you’ve received if the lender learns that you’ve misrepresented yourself. In addition to these criminal consequences, you’ll face a long list of other repercussions that could impact your financial future. For example, your credit score can take a large hit, and you may not be able to take out loans going forward. Even if you don’t get caught lying on your application, you are still causing harm to yourself. These loan requirements are put in place for a reason, and if you lie on your application to get a loan, you could get stuck with a huge debt that you cannot repay. It won’t take long for that uncontrollable debt to affect other areas of your life, too, like your ability to work and maintain a stable home. How do people get caught lying on loan applications
Financial institutions have certain precautions in place to protect them from giving a loan to an underqualified borrower. Your application and any supporting documentation will be checked for inconsistencies and inaccuracies, using public records and financial history to confirm the information you provided. Technology helps, too. Programs and software have special features in place to confirm information and flag inaccuracies. Some forms also use special embedded coding to track whether a document has been altered, modified or edited. How can I get a loan without lying
If an insufficient credit score is the main thing holding you back from a loan, you can take steps to improve your credit score before applying. Paying down debt, keeping old accounts open and refraining from lots of credit card or loan applications are all ways to boost your score and help you qualify for better rates and terms. But even if you’re having trouble qualifying for a loan with one lender, you’re not out of the running for all loans. For example, there are some lenders that . When you work with a specialized lender like this, you are more likely to gain approval on a loan that works for you. There are also a few categories of loans you may have better odds with: In-person loans: You may also find success by working with an in-person bank or lender who you have already worked with. Going into a branch to talk in-person means you are talking to an actual person who may be able to be flexible rather than an algorithm on a computer database. A pre-existing relationship also means they may be willing to work with you again, even if your financial history isn’t the best. You may pay a little more in fees or have higher interest rates. Personal installment loans: If you are worried about paying back the loan all at once, a could be right for you. These loans are paid back over a series of payments rather than all at once. Specialized loans: Other lenders may specialize in loans for students or . Banks or credit unions catered to student or military members may have flexible options available for personal loans. While they will still need your credit history, they may still give military personnel or current students with less than satisfactory credit history a personal loan. Get pre-qualified
The bottom line
Overall, the consequences that can come with lying on a loan application — everything from a lowered credit score to jail time — aren’t worth the rewards. Instead of lying to get a bigger loan, shop around for lenders that can give you the most money based on your current financial situation. There are lenders out there that offer , and that take more than just your income and credit into account. Learn more
SHARE: Mike Cetera Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information. Related Articles