What Happens If You Lie on Your Loan Application?

Filling out an application

If you’re facing financial hardship and need to take out a loan for help, you might be considering bluffing on your application. Lying about income on a loan application is the most common aspect for applicants to forge. You might be thinking something along the lines of “It’s only a white lie, what could go wrong?” But the reality of what happens if you lie on your loan application can be serious. Explore some of the potential consequences with the team at Xpress Cash, below.

Loan Application Denial

Whether you’re asking what happens if you lie on a car loan application or a personal loan application, the answer is the same. As we noted above, inflating and lying about income on a loan application is the most common blunder applicants may make. 

You might be counting on the hope that the lender will not verify your income, but you should always assume that they will. If they find out that you’ve fudged any of your financial information, it’s likely that your loan application will be denied. And if you’ve put up any earnest money already? It’s not likely that you’ll be getting it back. 

You’ll Be Made to Pay the Loan in Full

Let’s say you move ahead with lying on a loan application and it works. If the lender discovers your fabrication after you’ve already been accepted, they can make you pay the full amount of the loan all at once, rather than within the repayment period you agreed on. 

Your lender won’t always take this route, but even if they don’t, you run the risk of them altering the terms of the loan by increasing your interest rate or monthly payment amount. Depending on how much the loan is for, this can take a serious toll on your finances in the long-run.

Criminal Penalties

Believe it or not, it’s possible to face criminal penalties when you are caught lying on a loan application. Note that this consequence is extremely rare, but it has happened. Even if you’ve knowingly inflated your income by just a little bit, it can be viewed as criminal activity. Of course, some applicants might unknowingly make a mistake on their application, which is not criminal behavior. It all comes down to whether there was intent to deceive the lender.

Learn More With Xpress Cash

As you can see, the possible consequences surrounding what happens if you lie on a car loan application or any other type of loan application are simply not worth the risk. If you’re facing financial struggles and need to take out a loan, the team at Xpress Cash is here to help you explore your options and remain truthful the whole way through. For example, you might consider a no income verification loan. Visit us at one of our multiple Michigan locations or contact us to learn more today.