Stated income loans are loans that do not require your pay stubs or an income tax return in order to confirm the history of your salary. All that you have to do is fill out an application and the bank will process it and decide whether or not to lend you money.

There are pros and cons to using stated income loans, and those pros and cons include the following:


Self-Employed Loans: Self-employed individuals generally use stated income loans as they may find it hard to document regular income. Traditional lenders find it a risk if you make a great deal of money one month and then not as much the next month, whereas stated income loans are more willing to take the risk of loaning you money.
Quicker Application Process: You will usually get your money faster using a stated income loan versus a traditional loan. Stated income loans allow you to skip verifying your income and allow you to take out the “middle man” which helps speed up the application process.
Make Your Own Decisions: Banks often require complex debt-to-income ratios and other requirements before they will give you a loan. When you get a stated income loan, you decide how to spend the money you receive and what you can afford versus what you cannot.


Higher Interest: As a result of the “risk” that companies are taking, many stated income loans will charge a higher interest percentage than a traditional loan. The higher interest rates are a “reward” for the “risk” they take loaning money to you.
Higher Chances of Default: Stated income loans are defaulted on more often than a traditional loan. Those with more inconsistent income can struggle to pay off their loans if their income dips and they falter on their debts.

For more information on if stated income loans are right for you, please feel free to contact us. We are here to help and provide you with further information and assistance.

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