The Major Benefits of Stated Income Loans
As millennials enter the workforce, the landscape of business is changing. More and more people are neglecting the life of nine-to-five work and instead opting for freelance jobs and telecommuting. While this helps many achieve a certain type of lifestyle, working as an independent contractor doesn’t always look great to potential lenders. You can walk into a bank with a stack of pay stubs ranging from $20 to $400, though you might benefit more by looking into stated income loans and finding a business that will take you at your word.
Lending Made Simply
A standard bank loan is fairly straight forward, in that there’s a specific process and a lot of generic paperwork. Included in all that filing is an extended turnaround time during which the bank looks over your application, does some background checking and sorts through hundreds of other loan requests. Even after waiting all that time, you still might not be approved for a loan if something doesn’t seem right on your application. For people who don’t earn their living through traditional, bi-monthly paychecks, getting denied for a loan is all too common.
The beauty of stated income loans is that you have the opportunity to explain your earning situation. The lender will base your approval on how much you’re asking for, your creditworthiness and what you declare as your annual income. If the lending officer has reason to believe you’ll be able to repay the loan, you’re likely to get approved and receive your money much more quickly than if you go through the traditional channels. This option eliminates a great deal of bureaucracy and allows for loans to be granted based on trust.
Made for Modern Workers
With how competitive the lending market has become, it’s difficult for anyone without an established business and great financial history to get approved for a loan. Stated income loans are the solution to that problem, allowing entrepreneurs and freelancers access to needed capital without first having to provide an inordinate amount of financial documents. There inherent risks in borrowing money that isn’t secured in the typical fashion, but those are risks the workers of today should understand and be prepared to deal with.
People struggle to get approved for loans for a number of reasons, but earning a living in an unconventional fashion shouldn’t be one of them. If you’re looking to borrow capital and worried about how a bank might view your records, give some thought to stated income loans.