Honesty is still the best policy even with loan applications. This is advice given by lenders to consumers of new lines of credit and short-term loans, such as payday cash advances. This is in response to the growing number of people who are not being truthful on their loan applications just to be approved.
According to a head of a personal finance department of a well-known loan company, for the first quarter of 2008, there was a 13% increase in the number of consumers who are not being truthful on their applications. In fact, there were 21,780 cases of fraudulent loan applications for the first three months of 2008 as compared to 19,239 cases at the end of 2007. This increase in untruthful loan applications may be due to the fear of being denied credit, but being untruthful will be fatal in the long run.
Lying on loan applications does not benefit consumers. Every time inaccurate information is given or an untruthful application is made, there is a greater chance of producing a negative effect on the credit rating for the consumer and a possibility of being denied credit in the future because of the fraudulent answers. The most common reason why consumers are not being truthful is on their address information.
There are a number of reasons why consumers are advised to be truthful in their loan applications. The following are:
· Being untruthful on loan applications is a federal offense that is punishable by a fine and possible jail time.
· Being truthful to your lender about your real financial status will help them give you a loan suitable to meet your needs. Withholding the truth will not help you or may even put you into a stressful situation. Even if you lie, you lender will still find out.
· Take note that on the final page of your loan application there is a statement that says: the information contained on this application is true and correct. Affixing your signature on this statement means you are testifying for the truthfulness of the contents. If the information is found to be untrue, you are at risk of facing civil liability. Civil liabilities include monetary damages to anyone affected or experiences a loss because of the dishonesty or misrepresentations.
· All loan applications are verified so there is no need to lye on your loan application. Although most lenders of payday cash advances and other types of personal loans do not require credit checks, they verify details on your personal and contact information. Most lenders take the loan process seriously and any false claims will be detrimental.
· Lying about your income is not good. If your declared income to the government and your stated income on your loan application vary, this may put you in jeopardy of a criminal offense for falsification of records.
· If the loan officer advises you not to be truthful on your application, beware. This may be a fraudulent lender or is a scam.
Being truthful in your loan application is crucial and the safest step to take when borrowing money. Doing otherwise will do you no good and will only bring you harm.
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