Payday lenders can contact an individual’s employer in some situations as a part of the application process or in the event of a loan default. Payday loans are a popular option to receive fast approvals and same-day cash before payday.
Although you can expect a payday lender to call your company, they won’t identify themselves, and your employer shouldn’t learn that you’ve requested a payday loan.
A payday lender may call your employer to verify your employment status, to validate personal information or if there was a failure to make repayments.
Will Payday Lenders Contact Your Employer?
Some payday lenders choose to contact your employer; however, not all of them will. Some lenders prefer to use traditional means of identity verification, such as obtaining statements, pay stubs, and bills.
Others do a credit check to ensure your address and financial history are correct, but they still need proof of where you work and how much money you make.
People who call your employer to confirm your name, address, and job information can speed up the loan process by removing some steps that could take a long time.
Could My Boss Find Out About My Payday Loan Application?
A payday lender might call your workplace to ensure you have a job, but they won’t tell anyone who they are or who they are calling. It’s important to remember that payday lenders must abide by several rules and laws surrounding business, such as the Fair Debt Collection Practices Act (FDCPA).
This law forbids payday lenders from using unfair, abusive, or dishonest means to collect customer debts. This includes contacting a person’s employer without their consent or telling them about the loan. So, as long as your lender follows all applicable laws, your employer or boss will not be aware of your payday loans.
Why Would a Payday Lender Contact My Employer?
To verify your employment
For instance, to confirm that you have a consistent monthly income, most lenders want proof of regular employment. Calling your company and getting through to them to verify where you operate is one of the best ways.
Assuming the number is of a real company, this makes it very clear that you work for the company you listed on your application.
To validate personal information
A second motive might be to verify the data you provided on your loan application. Although this might not always be the case, this is something to be mindful of.
The prospective lender might contact you to confirm the amount you want to borrow, whether you’re in debt management or your monthly expenses.
The lender will often contact you immediately via email, mobile, or landline. The last resort will be to call your work number if all other attempts to get in touch with you are unsuccessful.
Failure to make loan payments
The lender may also get in touch with your employer if you don’t make loan installments.
This usually happens after several other attempts have been made to get in touch with you to get the loan back, for instance, by calling your landline or mobile number, sending you an email, or sending you letters.
The lender may have no choice but to get in touch with your employer if all these efforts fail.
How Can I Avoid Lenders Calling My Employer?
The only time a lender will want to speak with your employer instead of you directly is if you have missed a loan payment.
If a short-term lender needs to contact an employer because a borrower missed a payment, you should communicate with the lender directly to work out a different arrangement. You can ask for a new repayment plan to extend the time you have to repay the loan if you cannot make the entire amount every month.
As a last resort, a lender would typically call your employer, so it’s crucial to reply to any calls from the lender.
Can I Prove My Employment Status in Other Ways?
There are various ways to verify that you are employed if you are concerned about a lender contacting your place of employment. You may present a pay stub or payslip to the lender to verify your job while processing your loan.
Anything that proves you have a regular job and make more than $800 per month can be used, such as weekly or monthly paystubs. They want to make sure you can repay your loan on time, and they’ll utilize this data as part of their background investigation.
Although some lenders do not require evidence of work, you may need to give them documentation or speak with them on the phone if they do.
Key Points
- Payday lenders may call your workplace as a part of the application procedure or if the loan is overdue.
- Several laws and rules, such as the Fair Debt Collection Practices Act (FDCPA), govern how payday lenders do business.
- The FDCPA says that payday lenders can’t contact a borrower’s employer without their permission or tell the employer about the loan when trying to get their money back.
- You should speak with the payday lender directly to come to an alternative agreement if the lender needs to contact an employer since a borrower missed a payment.
- If you’re concerned about a lender getting in touch with your place of employment, there are several ways to prove you’re employed. When the lender is processing your loan, you can show them a pay stub or payslip to show that you are employed.
