Do Payday Loans Call Your Employer?

Do Payday Loans Call Your Employer?


4 Min Read

Many people trying to get loans ask why payday lenders check if you’ve got a job. It’s straightforward: for short-term loans like installment and payday ones, your income is the best way for the lender to know you can repay them. They want to be sure you’re working and getting regular checks so they can feel confident about approving you.

Key Points

  • It’s a common practice for a payday lender to contact your employer.
  • Lenders will ask to speak with your boss or even HR manager to check your employment status and regular income.
  • Lender calls occur before the final loan approval decision or after your payday loan default.

Reasons for a Payday Lender Contact My Employer

Here are the three main reasons why might your payday lender contact your employer:

  • Regular income verification. They just want to ensure you’re getting at least $1,000 monthly. They need to talk to your boss directly.
  • Information check. The payday lender will also call or email your boss personally to confirm the details you provided about your workplace.
  • Loan default. If you cannot repay the loan, the lender must contact your employer to see if you are still working and receive the promised salary to cover the loan.

How Do Loan Companies Verify Employment?

When you apply for a loan, the company will want to ensure you have a steady job and income to repay. Here are some of the ways they’ll check if you are employed:

  1. Personal information. You fill out the form about your job, where you work, how long you’ve been there, salary, etc. They need the details to look into it themselves.
  2. Lender’s calls. Expect a call from your payday loan officer to your boss to confirm everything you put on that form. They might send an email or fax instead, but they verify with your workplace.
  3. Pay stubs and W-2s. These documents also prove you’ve got a regular paycheck coming in, so send them a few months’ worth. The same applies to bank statements showing consistent direct deposits from an employer in your checking account.
  4. Outsource verification agency. If all else fails, the payday loan company can hire an outside agency to fact-check your employment details. These verification services validate where people work and what they earn.
  5. Tax returns. There is a little more paperwork for self-employed consumers. To present the full money picture, you’ll likely need recent tax returns, profit/loss breakdowns, and invoices.

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Other Ways to Confirm Your Employment

You can ask your boss for an official letter that says where you work, your title, how much you make, and that you’re employed there. It should be on company letterhead and signed by someone authorized. If you own a small business or work for yourself, showing them your business license or registration documents verifies that you’ve got a job.

How Do I Stop Payday Loans from Calling My Job?

If a payday lender contacts your boss about missed payments, it is best to talk to them directly. In case you need help paying back the total amount or catching up, ask for a payment plan that splits it into smaller installments over more time.

Do Payday Loan Places Call Your References?

Payday lenders regularly call the references given on the loan application. They use these contacts to confirm who you are and see if you can repay the cash. It’s a common underwriting process among payday loan providers that need to check your employment details.

Bottom Line on “Why Might the Lender Contact My Employer?”

Payday companies can call up people’s employers when they give out loans. It’s standard procedure as they want to ensure you have a job and get paid regularly. Loan providers want to confirm that the details you put down on your application are legit. Part of it is covering their backs in case you default on the loan. If you stop making payments, they’ll want to know if you got fired or quit your job, and figure out a way to get their money back.

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Kerry Vetter

Written by Kerry Vetter

Written by Kerry Vetter

Kerry is a finance expert thanks to her Boston College education during the 1990s. Today she shares this valuable knowledge through the pen and online from her home in Chestnut Hill, Massachusetts. The years of experience results in relevant, practical and wise advice.

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