FCLOANS
The FCLOANS platform connects users with online lenders offering the most competitive terms, ensuring access to optimal loan options.

By providing expert guidance and carefully curated financial solutions, FCLOANS empowers users to make informed decisions and effectively manage their financial needs.

Read and agree to Terms, Rates, Privacy Policy before submitting your request. Your personal information is safe with us.

Employee

Lenders may ask for employment information to evaluate the ability of a borrower to pay. It is important for an applicant to be an employee since this status guarantees a stable income. This means that the lenders minimize their risks regarding non-repayment of the debt. Who are employees, and how do they differ from other categories of people who work for money?

Employee vs. Worker: What’s the Difference?

An employee is a person hired to work and towards whom the employer has certain obligations. All terms of employment are stipulated in a special contract, and they may include:

  • Rights and obligations of the employee and employer;
  • Salary amount and conditions for its increase;
  • Possible benefits in the form of sick pay, health and retirement plans, etc.

In addition, employers pay some taxes based on their employees’ salaries.

Workers can be employees, independent contractors, or self-employed. A worker is an individual who works for a business or organization, but they may do it under different conditions:

  • The party who hires an independent contractor pays them only for the work performed.
  • All benefits in the form of sick leave, health plan, etc., do not apply to the self-employed.
  • A business or organization does not make tax deductions for independent contractors because paying taxes is the personal responsibility of the self-employed.

Thus, lenders ask for confirmation that the borrower is an employee because, in this case, the employer has certain obligations before the borrower. This applies to regular payment of wages and financial support in case of health problems, etc.

Does Any Employee Have a Chance of Getting a Loan?

Being an employee increases your creditworthiness in the eyes of a lender. However, in addition to the employment, the following criteria are also important:

  • How does your salary match the size of the loan you want to borrow? In this case, the lender considers the salary size and the amount that remains after paying the obligatory payments on other loans.
  • How long have you worked at the specified firm or organization? The longer an employee is on staff, the more stable their employment is. If you received a job just a couple of months ago, the lender may perceive this as a risk factor.
  • How reputable is your employer? If you work for a reputable organization or a thriving business, this fact will work in your favor. On the contrary, if the employer’s reputation is questionable in the eyes of the lender, this does not add advantages to the borrower from the lender’s point of view.

Loan and Change of Employment

  • If you take out a short-term loan, you repay it quickly, and a change of job is unlikely to significantly affect its repayment.
  • If you have a large long-term loan, you need to inform the lender about the change in your employment status. Moreover, many lenders include this in the loan agreement since your employment status determines the likelihood of repaying the debt.