Upstart verifies income by using AI to analyze documents like recent pay stubs, tax returns (W-2s, 1099s, 1040s), bank statements showing deposits, or official job offer letters, depending on your employment type (W-2, self-employed, gig worker, etc.). They look for consistent, verifiable personal income, not household income, to assess your ability to repay the loan.
Personal loans can verify employment, but it doesn't always happen. It is more common for a personal lender to verify your income, either with tax documents or bank statements, but the lender can absolutely call your employer to verify your status if they feel it's necessary to do so.
Tax Returns (W2, 1099, 1040)
Tax returns provide an official, government-verified record of annual income. They are especially valuable because they: Cover a longer timeframe than pay stubs, offering a more reliable view of financial stability. Show multiple income sources (employment, self-employment, investments).
If something is unclear, such as your current employment status, personal lenders can contact your employer to verify that you actually work there.
Yes, Upstart will have to check your bank account after you submit your rate inquiry, which is an initial request for an APR estimate before you apply for the loan. Upstart verifies your bank account to confirm your identity, income and debt obligations so they can ensure the accuracy of your loan application.
During loan origination/processing
Every lender will perform income and employment verification before a loan goes through the underwriting process.
Proof of employment income
Laws Regarding Employment Verification
While federal law does not strictly define what you can or cannot say in a reference check, it does impose liability for: False or misleading information. Retaliatory statements. Violations of privacy.
No, Upstart does not approve everyone. To qualify for a personal loan through Upstart, you need to be at least 18 years old (19 in NE and AL), have no bankruptcies or public records on your credit report, and have an annual income of at least $12,000, among other requirements.
Common Factors That May Lead to a Non-Approval
Insufficient Credit Profile – Limited credit history or unreported limits may make it difficult to determine your ability to repay. Past-Due Accounts or Delinquencies – Prior payment issues, charge-offs, or checking account closures may factor into the decision.
In rare cases, the IRS can press criminal charges.
When the IRS identifies fraud, the IRS can pursue civil or criminal charges. The IRS prosecutes relatively few cases each year – and they usually involve large omissions of income, tax evasion or tax protest schemes, or lying to the IRS in an audit.
During underwriting (initial verification)
Lenders spend the most time on the first employment verification. This verification is the most thorough. The lender may contact your employer, review pay stubs or W-2s, and compare it all against your application.
Red flags on a background check are inconsistencies or negative findings like criminal records (especially violent, theft, or fraud), false information on applications (education, employment dates), poor credit history (for financial roles), failed drug tests, bad driving records (for driving jobs), negative references, or unprofessional social media activity, all suggesting a risk to the employer's trust, safety, or financial stability. Lying or omitting information is often a bigger issue than the underlying event itself, signaling a lack of integrity.
If zero income is due to the loss of a job, this can be proven by a termination letter or a notice of severance pay on your last paycheck stub. If job loss is due to company closure, you could have a notification letter provided by your previous employer.
There are many alternatives to pay stubs, including tax returns, bank statements, employer income letters, 1099s, Social Security statements, court-ordered payments, unemployment benefit letters, annuity statements, interest and dividend income statements, and bonus/incentive payout records.
Employment Verification
To confirm employment details, we may request: Recent pay stub or job offer/contract from your employer. Business license or tax filings (for self-employed applicants)
To spot fake pay stubs, look for unprofessional formatting (blurry text, inconsistent fonts, misaligned columns), illogical numbers (perfectly rounded amounts, math errors), missing or vague details (no company info, generic tax info), and pixelated logos or watermarks; real stubs are professional, precise, and detailed, often from payroll software like ADP. Always verify by calling the employer directly (after getting permission) or checking bank statements.
To qualify for a personal loan with no income, you may need to provide collateral or apply with a cosigner. If you have income that's difficult to prove, you may be able to provide alternative documentation, like bank statements.