Proof of salary is one of the documents usually to be submitted with a loan application. However, some people do not want to present their proof of salary for various reasons.
Classic loans without proof of salary
The pledge loan is the oldest and best known loan without proof of salary. With this type of loan, the pledge serves as the sole security for the loan, so that the pledgee does not have to prove or state his income. Credit cards are also issued by most issuers without proof of salary; instead, they are initially given a limited amount of money.
If you want to increase this, you often have to submit proof of income or apply for the credit card limit to be extended a few years after the card was issued. Ordering in installments from the mail order company is almost always required without proof of salary, even the question of income levels is often omitted.
However, some mail order companies request a deposit to be paid immediately for first-time customers. Comparable methods of lending are known from vehicle financing, since car banks often consider the financial performance of a new car buyer to be sufficiently proven if they can pay a third of the purchase price as a down payment.
The waiver of proof of salary as a means of simplifying processing
The easiest way to grant a loan without a formal application is the overdraft facility on the checking account. This is mostly a loan without proof of salary, even if the bank determines the amount of the overdraft facility on the basis of the regular incoming payments. In addition to the salary, these can come from any other source and still have an effect on the maximum amount of the overdraft facility.
The fast loan processing desired by many customers also means that loans are increasingly being issued without proof of salary. Since it takes time to check a submitted proof of salary, lenders increasingly refrain from submitting it, especially for instant loans. Refraining from submitting proof of salary does not mean that the bank does not request income before lending.
In any case, this must be stated in the loan application. Deliberately incorrect information on the amount of income in the loan application leads to criminal consequences if the borrower does not properly repay the loan later. In addition, after a personal bankruptcy, the residual bond is excluded if the consumer sneaked in a loan with false information.
Compare interest rates
Applying for a loan as a loan without proof of salary sometimes causes consumers to apply for a loan without checking the debit interest to be paid. Since the financial institutions have to price the increased credit default risk associated with the waiver of the payroll into their interest rates, these are higher than for loans granted with all the usual documents. So that the borrower does not pay too much, he compares different offers for lending without proof of salary.