Many potential applicants for payday loans for bad credit are worried that when they apply, the lender will contact their employer. This is likely to be a cause of a bit of awkwardness. You can rest easy, payday loan potential applicants and borrowers alike because, your potential lender company will not contact your employer as part of the underwriting process.

Payday lenders will only call your workplace to speak to you, not to speak to your boss.

Once you make a loan application, your loan will be denied or put in “underwriting” and this is where the lender is trying to confirm your details, carry out some final checks and eventually sign off your loan to be funded. You may notice in some application forms that they ask for your employment contact details – however, this is not going to be used to contact your employer, but rather for proof of income, employment and as a last resort contact. The details which you submit to a lender are confidential and are not to be shared with any third parties according to the regulations set out by the FCA.

When might an employer be contacted by a payday lender?

To prove your employment

Confirming that you are employed is a key thing for most payday lenders to ensure that you have a regular income coming through. By calling your employer and being put through to you is a very clear indication that you are employed – provided that the numbers match up to the company’s.

To confirm information

A lender will typically need to speak to you over the phone to confirm your information (although some may not). Information they need to confirm includes the amount you wish to borrow, your monthly expenses and whether you are in debt management. If they cannot get hold of you by email, mobile or landline, they may try your work line as a last resort.

If you have not repaid your loan

In addition to the above, if you have failed repaid your loan, the lender may contact you after failing to get hold of you by traditional means i.e your mobile or home line. After they have tried to contact you by email and phone, they may call you at work as a last resort – but again, will only ask to speak to you and your employer will not be involved or even told what the nature of the call is about.

Daniel is a loans expert based in London and has been working in the payday loans industry since 2010.