Considering the tough economic times in the present world, very few people can survive without working and earning a significant amount of money each month. You have to have the means to put groceries on the table and pay your bills each month before you can even think about living a comfortable and luxurious life. Whether you’re employed, in business, or work remotely as a freelancer, you have more than just a few reasons to thank the universe.
Apart from the obvious benefits above, a stable income gives you a wide range of other privileges, especially when dealing with businesses, government organizations, and nonprofits. More often than not, they usually include income proof as part of the requirements or qualification criteria. In case you’re wondering, here are four situations where one might have to provide proof of income.
1. Applying For a Bank Loan
For most people, loans are inevitable whether your income comes from business or employment. When you approach a bank for a loan, one of the first things they ask for is documented proof of your income. In this regard, payslips are by far one of the best ways you can prove your income as an employee or self-employed individual. A paystub generator lets you produce these payslips automatically and accurately each month. Also known as check stubs, these documents can be printed and used to show income proof when approaching banks for a personal loan or mortgage. The best part is that the process is easy and virtually effortless.
2. Renting Property
These days, landlords and property managers want to rent their properties to the best tenants out there. Most of them put a lot of effort into screening potential tenants and assessing their eligibility. Alongside your background, conduct, and everything in between, most of them will want to be sure you can conveniently afford the property, house, or apartment you are seeking to rent. Consequently, they might ask you to provide income proof, which can be in the form of:
- Bank statements
- Bank account statements
- Employment offer
- Tax returns
- Social security papers
- Court order
- Unemployment documents
- And so forth
3. Getting Some Types of Insurance
If you are like many people, you will need one type of insurance coverage or the other at some point in life. Insurance companies also need to be sure you can afford the policy you’re applying for without straining your finances so much. This is why some policy providers as for proof of income, especially when seeking some types of coverage like:
- Business insurance
- Life insurance
- Health insurance
- Professional indemnity insurance
- Among others
This way, they can also determine the best premium rates to give you depending on the type of policy being sought. For the purpose of financial underwriting, income proof is an essential task for insurance companies. It allows them to minimize avoidable risks and customize policies to the applicants’ needs.
4. Approaching Angel Investors
Finally, income proof is essential for business owners too. When seeking running capital from angel investors, many of them will want to know how your company has been performing in the past alongside its current financial position. They might ask for a wide range of documents, including bank statements, accounts books, and payroll records before injecting funds into your business.
There are many scenarios where you might be needed to prove your income. Apart from the above, income proof may also be needed by government agencies if they doubt your source of wealth or suspect you of conducting shady deals. Nonetheless, this piece provided you with information on the importance of income proof and how you can justify your earnings.