Whether you need to make a large purchase, pay off debts, or even make the occasional emergency expense, taking out a personal loan could get you out of a financial pickle. And while it may be tempting to lie about your current salary or employment status to secure the loan at whatever cost, misrepresenting such vital details could land you in hot water.
What are the risks when you lie on your loan application?
If the lender catches you lying on your application, losing the loan will be the least of your worries. You could go to jail because fibbing on a loan application is a crime. According to the Federal Bureau of Investigation (FBI), making false statements on loan applications is a white-collar crime and is punishable by up to 30 years of imprisonment.
While going to prison for lying on an application is rare, it can happen – and has happened.
On top of potential jail time, your credit score and capability to take out loans may be impacted by lying on your application.
What are the most common lies made on loan applications?
Now that you know the risks when you lie on your loan application, here is a list of the most common misrepresentations made on loan applications. Use this list to avoid the following pitfalls and ensure that you are being straightforward with your application:
- Lying about your income
- Failing to report outstanding debt
- Falsifying employment status
- Making false residency claims
- Exaggerating the value of your assets
- Lying about the purpose of the claim
As with anything involving finance, you should never lie about the information you submit in your loan application. And if you think a particular loan would be too difficult to repay, remember that the consequences will be severe if you try to inflate or falsify your financial credentials. Facing this type of charge or investigation, it is wise to seek the guidance of an experienced white collar crimes attorney.