In the realm of personal finance and lending, the question of income verification is crucial. It’s a key factor that lenders like LendingClub consider when evaluating loan applications. Since its inception in 2008, LendingClub has taken steps to verify the income of loan applicants. As of now, they have confirmed either income verification or income source verification on a significant portion of issued loans, totaling 69.6%.
For those unfamiliar with income verification, it’s essentially a process where loan applicants are asked to provide documentation supporting the income they’ve claimed in their loan request. This can include various forms such as paystubs, W-2 forms, or other tax records. These documents serve as evidence to back up the stated income and give lenders like LendingClub the confidence that the borrower has the means to repay the loan.
The importance of income verification cannot be overstated, both for the lender and the borrower. For the lender, it’s a risk management strategy, ensuring that loans are given to individuals with the financial capacity to make repayments. On the other hand, for the borrower, it helps establish credibility and increases the likelihood of loan approval, often resulting in more favorable terms.
(Response: Yes, LendingClub does verify income, conducting either income verification or income source verification on 69.6% of issued loans.)