Waitress cannot use tips to obtain consolidation loan?
I am required by Indiana state law to report 100% of tips I make. However, I applied for a loan to get some bills consolodated and they will not accept my tips as part of my income. Seems very unfair to me. The company I was considering using was called Personal Finance LLC. It is a high interest rate but I make about $1000 per week with both my jobs. They wont accept the waitress tip income…even though it is on my pay stub what tips I make. sigh
I do report 100% of all cash and credit card tips. My employer taxes me on tips based on the amount of sales. Wether I get a 17% tip or not I am taxed on it. It is a shame that IN passed that law making us report it but will not make others count is as income….It will be on my W-2 as such
Unfortunately it is up to the company’s underwriters to determine if they could use the income. Even though tips are not as inconsistent as commission, they are still not considered a consistent source of income.
However, some companies will allow tips under certain requirements. For example, they could average out your year to date and compare it to the wages you show in the prior year’s w-2. It depends on the company. Citifinancial has done it but with changes in the economy lately, things may have changed.
No, it’s not guaranteed income, but I’m sorry for your situation.
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That seems, more than unfair, more like illegal. That consolidation company probably just didn’t know/wasn’t following state laws. And they have to. They can still deny wanting to help you, but if they did, they would have to follow your state law and count your tips for the loan.
Call back, explain your circumstances, and demand to have your application considered again. Make sure they do not count it as a second inquiry and tell them that they shouldn’t because they didn’t consider the loan originally fairly.
Good luck.
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Unfortunately it is up to the company’s underwriters to determine if they could use the income. Even though tips are not as inconsistent as commission, they are still not considered a consistent source of income.
However, some companies will allow tips under certain requirements. For example, they could average out your year to date and compare it to the wages you show in the prior year’s w-2. It depends on the company. Citifinancial has done it but with changes in the economy lately, things may have changed.
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Not unless you are reporting the tips on your taxes as income earned. Otherwise, its money under the table and illegal. If you do report the money it can add to your net income. You can use that overall net income, not the tips alone, to get your loan.
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Tips are not guaranteed income. Some lenders also won’t count overtime even tho the person works so many hours overtime every week.
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Hey that is absolutely insane! I’m also a waitress (part time) in Indiana (I work in downtown Indy) and I recently had to secure a private loan for some home repairs and credit card consolidation. I also had to report my tips as income, but with my total income (which is pretty similar to yours, it seems, with both of my jobs) I didn’t have a problem securing a loan through an Indy bank. Just curious where you work, because that can make a difference. The restaurant I serve at actually backed me up at the bank with a letter from my manager stating the regularity of our business and my tips (I guess that’s what they were concerned about). Where are you working? Would they be willing to provide a letter of employment and your history there?
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