Why do lenders ask for a proof of income or business before a loan sanction?

When it comes to getting loans from banks and lenders, there is one thing that is common for both which is the scrutiny of the source of income of the loan seeker. When they sanction a certain amount of money that you require, it is often based on a trust that comes from the source of income that you have.

When they ask you to submit a proof of income in return for the loan money sanctioned as fast cash here are the reason why they do so.

They do not wantto run a loss

Believe it or not, it is a business that they are into where they lend money to people in exchange for a certain amount of interest. When you do not show a proof of regular income, there is no guarantee coming from your end that you would be paying the loan amount back without duping them in any way. A fixed source of income that is more than the installments that you are deemed to pay is sufficient for them to sanction the loans.

They determine your stability

When you provide the proof of income, you are to also state the fact that you work for a particular organization. While you do so, the number of years that you have served in that company lets them determine your stability with a job. Anyone who has worked for over 4 years in a particular organization is termed as stable and serious with their work and wouldn’t fail to pay up for the loan amount on time.

They intend to know your other financial responsibilities

When you have other financial responsibilities to take care of such as stakes and debentures, you are likely to be financially stable and have enough finances tofund the loan that you have applied for. When that comes to the scanner of the lenders such as Pret911 loans, they stay assured of the fact that you would be paying their loan amount on time without having to dupe them in any way.

They receive a guarantee from the owners of your organizations

When you help out with proof of income, along comes a guarantee from the management of the organization about your financial stability as well as a guarantee that wouldn’t turn out to be a fraud. This assurance comes in the form of formal letters that can be referred to, as and when required.