No Proof of Income: Non-Traditional Loans

2007-03-08 10:33:40

( Financial )



EARNING BUT NO PAPER PROOF

No proof of income loan refers to a situation where you are earning money, but cannot present any legal documents to prove it.

The problem with working at home or doing free lance jobs is that you have no regular employer to certify your regular income. This can be a difficult situation, especially when you are applying for financial products such as loans and credit cards. Most banks and lending institutions will only entertain loan applications from those who have regular or mainstream forms of employment, and will not consider those who do not fall under this borrower profile.

More and more people are going into self employment through free lancing or work at home arrangements. The truth is that these people earn as much, even more than what regular employees make every pay day.

UNTAPPED MARKET

This is a significant market that lending companies are beginning to acknowledge. That is why there are an increasing number of lending companies offering no proof of income or no income verification loan arrangement.

No proof of income means that you are not required to present income documents such as pay slips and payroll accounts. However, you will still be asked to present other financial documents and a self certification form that indicates your average income per year.

No proof of income loans are also very flexible because it takes into account your intermittent cash flow. Some free lancers earn a lot on a seasonal basis, with periods of very high and very low income. No proof of income loans consider this and allow you to make irregular payments as well. You can adjust how much you pay off your loan to how much money you have at that time.

Of course, keep in mind that a no proof of income loan is still considered high risk and non-traditional, and as a result, has higher interest rates than mainstream loans


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