It’s in the nature of human beings to show how smart they are. They are not afraid to tell a few lies if it makes them look more intelligent and to show just how clever they are. Unfortunately, not everybody lies to be smart. There are sometimes darker reasons for bending the truth to suit oneself.
Some people are pathological liars; others deem it necessary to lie for other reasons. But how about telling a lie on a loan application? Lying in the business world means falsifying, and falsifying equals fraud.
Your ‘White Lies’
Admittedly, “white lies” can often save you from embarrassment as well as helping you to avoid hurting others. Lies can be told to maintain your privacy, as well. Sometimes, though, it can help make things easier when you want something that may be normally difficult to come by.
False Info on Your Loan Application
If you put the morality issue aside for the moment, then you can say that providing false information on your loan application is not so bad – unless you are caught, of course. And if your lie is exposed? Will it disqualify you and affect the loan process? Perhaps we can throw a bit more light on this issue.
Laws of Lending and Borrowing
The lending industry is governed by some laws. The laws state that the lender and the borrower will be honest in their dealings. When a borrower signs the credit agreement, it shows the repayment terms. In the same way, using that logic (and law), the borrower should provide the lender with true information and statements.
If found out that you lied in your loan application, you will obviously lose all credibility as a borrower. It will certainly be held over your head for future transactions. The truth of the matter is that if information on your loan application is found to have been purposely put there, not an innocent error, you have committed a crime. Penalties can vary from fines to jail, depending on the severity of the matter.
A borrower needs to be even more careful when applying for an unsecured loan, with no collateral involved. A rejected loan application results in long-term vulnerability for future applications.
You Set Your Own Trap
Lying to obtain an unsecured loan is not recommended even if you are not caught. You will get a loan for which you are not qualified. That can lead to having an unmanageable debt and eventual loan default.
What can Happen?
What can happen if you enter false information on a loan application and it’s found out?
- The loan is rejected
- Your credit score is badly affected
- You may have to go to court and be fined
- You may go to jail
- You may not submit future loan applications
- You lose your integrity
Our ultimate advice is: Don’t try to act so smart by lying on your loan application. It’s actually pretty dumb!