A personal loan can help solve a pressing financial problem, or help you make a big purchase that you normally can’t afford immediately. Family vacations, emergency repairs to your home, even expensive medical bills – a timely personal loan can help pay these off, and more.
But before you can start borrowing money to pay off your expenses, you must go through an application process. Creditors will want to see that you’re financially capable of paying back the loan before they can lend anything.
You might be tempted to lie a little bit to improve your chances of getting your loan approved. Lying includes claiming you have multiple fake jobs, that you live somewhere else, that you earn more than you actually do or hiding the fact that you have outstanding debt, among many other possible deceits.
But by Texas law, lying on a loan application is a punishable offense.
Penalties for loan application misrepresentation
Making a materially false statement to obtain a personal loan is an offense in Texas. Per state law, the severity of the crime and the penalties for anyone convicted of making a false statement to obtain credit are based on the value of the loan applied for:
- Loan worth less than $100: A Class C misdemeanor with a $500 fine.
- Loan worth more than $100, less than $750: A Class B misdemeanor with a $2,000 fine and up to 180 days in jail.
- Loan worth more than $750, less than $2,500: A Class A misdemeanor with a $4,000 fine and up to a year in prison.
- Loan worth more than $2,500, less than $30,000: A state jail felony with a $10,000 fine and up to two years in prison.
- Loan worth more than $30,000, less than $150,000: A felony of the third degree, with a maximum 10-year prison sentence.
- Loan worth more than $150,000, less than $300,000: A felony of the second degree, with a maximum 20-year prison sentence.
- Loan worth more than $300,000: This is the highest possible offense, a first-degree felony. On conviction, the person faces a life sentence or up to 99 years in prison.
This means that no matter how small the loan may be, lying on an application is still a criminal offense.
Lying on a loan application can get you into trouble with the law. If you’re convicted, you potentially face jail time and hefty fines, costing your deceit more than what you would’ve spent on the loan. Don’t underestimate a criminal charge for lying, and carefully consider your defense options.