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How to verify self employed on private student loan....

New Member

How to verify self employed on private student loan....

       I was recently approved for a private student loan for $10,600 from First Dakota Bank and they want verification of my income, etc.  I go to school full-time and also work, but self employed as a software engineer under my brother in law.  I don't receive pay stubs, just cash from him for doing jobs he gets and passes along to me.  How can I prove to them my income then?  Will they just deny me if I tell them that and provide no W-2's?  

      Just trying to figure this all out, as I need a private loan for my final semester of school and my Bachelor Degree.  Any help would be appreciated.


Thank you!

Message 1 of 5

Re: How to verify self employed on private student loan....

Welcome! I am new to these forums as well, and I see you asked your question days ago, so I will try to answer.

Short answer: you cannot verify that you are self employed because you are not self employed.

Based on your post, your bil appears to be paying you "under the table". Again, you are not self employed. You are employed by someone who may not be following the rules when it comes to taxes.

Do you file taxes using documents other than w2s? If so, use those documents to prove income. If not, perhaps it is time to find above-the-board employment. Situations like the one you are in generally benefit the employer, not the employee.

You will learn a lot about finances from myFICO members (as I have).

Mods, I am not sure why I am the first to reply, and if I broke any rules in this reply, please delete and accept my apologies.
Message 2 of 5
Established Contributor

Re: How to verify self employed on private student loan....

The lender will only use income you report to IRS on your Tax Returns. If you don’t report it then you can’t use it to qualify. Sorry
Message 3 of 5
New Visitor

Re: How to verify self employed on private student loan....

Direct loans are a much better, simpler, and less stressful way to at least manage undergraduate student loans. These are kids fresh out of high school who simply do not have the expertise or experience to pick a lender intelligently. If they wanted to bring back FFELP for graduate students, that might be a decent idea because it would give graduates a competitive market with benefits from different lenders competing for their business, but undergraduate loan rates taken at thesis assistance site from the Direct loan program are low and the program is easy to navigate.  Also the government does not profit on federal student loans. The current accounting method does not take risk into account, making it appear on paper that there is a profit. The profit is only on paper.

Message 4 of 5
Frequent Contributor

Re: How to verify self employed on private student loan....

File your taxes using a Schedule C where you claim all of the wages your BIL paid you. You'll owe taxes but at least you'll have proof of income for your loan. You can set up a payment plan with the IRS for the taxes you owe. To reduce your tax bill you can claim any business expenses you paid, however this will also reduce your income for your income verification purposes.


As others have stated, your BIL should not be paying you under the table and you are likely an employee. (See IRS guidance here.) You should find legit employment.

TCL: $1,450 | AAoA: 7.8 yrs (I can thank my student loans for this) | Util: 62% (high due to charge-offs) Smiley Sad
Cleaning up and rebuilding after a long hiatus from credit
Message 5 of 5