Going through a drawer of files with unfamiliar receipts, slips and documents can prove to be a bit difficult in case you are not organized. Sorting these documents out can prove to be a difficult task It is a long and tiring process that includes going through each document with proper care to establish the figures which are worth keeping.
It is common for most people to get rid of documents which they do not know through the process of sorting. This is not a recommended means of handling business especially if you anticipate handling large purchases in the future. The importance of these papers cannot be overemphasized since they act as proof of employment and income to lenders.
Still wondering why you should be up to date with these documents? To ensure you keep up with the pay stubs, here is a list of reasons why they should be updated.
1. Income Proof
When applying for a personal loan, there is the verification process which includes presentation of the relevant documents. This is inclusive of the proof of incomes. The lenders need documents which act as proof of income for verification of a borrower’s ability to repay the loan.. The documents act as proof of income and are different dependent on the lender. There is the need for presentation of a different set of requirements which related to showcasing proof of employment. For some lenders, all they need is one pay stub for proof of income, but for other lenders, they need several pay stubs in order to create a consistency with the borrower’s income level.
2. Evidence of Employment
To have a better picture of the ability of the borrower to repay a loan, there needs to be a display of the proof of income. The documents are important in showcasing your steady job while establishing a solid stream of income. For self-employed borrowers without a steady job, it is part of the requirements criteria to showcase the amount in the bank and salary earned each year.
3. Filing for Income Taxes
The paychecks for the pay stuns form an essential part in ensuring a smooth process when filling your income tax. The stubs can be used by the lender to establish the borrower’s total income and the payable amount of taxes and the related health benefits. This is important in helping itemizing the taxes.
4. Work Reference
Pay stubs are not only meant to display proof of income and employment, there are other additional uses. This act as proof of number of hours worked and paid per period in your establishment and the length of the employment.
Pay stubs can be termed simply as resumes for one’s income. It displays all the relevant information that touches on your pay period and annual totals.