Last updated on June 20, 2024 by Wade
We all know that juggling life as a single mom is like being the CEO of a high-stakes business, requiring strategic skills and dedication every day. But sometimes, you may find that life presents additional challenges—like managing bills that pile up like unwelcome guests.
When these times require financial support, a loan may be your only ally. But here’s the thing: Getting a loan means proving your income, which can sometimes feel like just one more daunting task on your never-ending list.
That’s why today we’re going to talk about different ways to show lenders that you have the financial strength to repay your loan. Whether you have pay stubs, tax returns, bank statements, etc., we’ll walk through them together and teach you how to use them to prove your income.
1. Tax return
You know how a snapshot captures a moment? Well, think of your tax returns as an annual financial snapshot – they lay out your entire income in a year.
So when your goal is to prove your income, filling out a tax return quickly is like serving a full meal to satisfy any craving a lender may have for your financial health.
These documents reveal a wealth of financial information, such as total income figures, type of income (whether from salary, investments, or freelance work), and even potential red flags, such as larger-than-life write-offs.
If you provide at least two years of tax returns, the lender can come up with an average income figure. They also look for patterns, such as stable or increasing income. If this is your situation, you don’t have to worry too much about getting a loan (unless you have other financial difficulties).
2. Salary or benefits
As a single mother struggling to pay her bills, you may find support in a payday loan. This is not an ideal way to get out of financial problems, as these problems are not without risks and pitfalls, but sometimes, it is the only way.
If this happens to you, make sure you’ve done your research and calculations to ensure you don’t have to delay your payment. High interest rates aside, you will face significant financial stress if you are unable to repay your loan on the due date.
Since these are quick loans, you won’t be asked to provide a lot of documentation. All you need is a steady source of income, a valid ID, and an active checking account. You can prove your source of income with a paycheck (if you have a job) or a benefit letter (which you can get online).
3. Payslip (even if lost)
These little pieces of paper (or digital records) are almost a GPS tracking of your earnings. They’ll tell the lender how much you’ll make each payday, without any detours.
When you want to prove that, yes, indeed, you have a steady flow of cash coming in, handing over a bunch of recent pay stubs is a bit like showing off photos from last week’s fishing trip – the proof is right there in your files.
Typically, lenders will ask for an amount of around one or two months, which is enough to check if your income stream is continuing to flow. But your pay stub reflects more than just total earnings. It also breaks down taxes, retirement plan contributions, health care costs, and bob — the whole nine yards.
This finer detail is important because it shows what you really take home after Uncle Sam takes his share and what you can actually spend or save. That’s what lenders care about when assessing whether you can easily manage your new debt.
Now, if you’re not used to keeping your pay stubs in a safe place, you might be feeling a little panicked. Fortunately, you can recreate them online using FormPros’ reliable payroll generator. It’s a simple way to get your latest financial information in digital format and send it to prospective lenders.
4. Bank statement
Think of your bank statement as a breadcrumb trail through the financial forest. They show directly where the money comes from and where it goes. This information can transform you from an unknown applicant to an organized person when you apply for a loan.
If your salary or income takes the form of ongoing deposits, that’s wonderful for lenders. It celebrates reliability and stability and is like comfort food to those who decide to lend you money.
Don’t forget that it’s not just wages that matter, but any regular injections, such as property rent or side hustle payments. They are all part of the overall cast that makes up your revenue story.
Now here’s a pro tip: organize your transaction history before sharing it. You want these bank statements to be clear enough for lenders to easily keep track of the plot—not to mix late-night snacks with important stuff. Boil it down and let those revenue tidbits shine without getting lost in other financial noise.
wrap up
Before you start frantically looking through your financial documents, remember that knowledge is power. This is especially true when choosing a lending partner. It’s a bit like finding a trustworthy nanny for your precious child – you have to do your homework to make sure they are the real one.
Research the models thoroughly and vet potential lenders, as you would any important decision affecting your home. Remember, not all glitter is gold. Don’t just look past the glossy brochures and flashy promises. Look for reviews, compare prices, read the fine print keenly, and listen to what other single moms have to say. Their stories can guide you away from hidden pitfalls or point you toward enthusiastic people who genuinely want to help you grow.
