Income Recognition and Reliability in Lending Assessment
Lending assessment begins with income — but outcomes are shaped not simply by how much is earned, but by how income is recognised, evidenced, and interpreted over time.
Different income types carry different levels of stability, continuity, and policy sensitivity.
Two borrowers with similar earnings may experience very different borrowing outcomes because the structure and reliability of income differ.
This section explains the mechanics lenders use to determine:
- which income can be included in assessment
- how variable, self-employed, rental, or overseas income is treated
- what evidence supports recognition
- how continuity and stability influence long-term borrowing capacity
These principles apply across residential, equipment, and commercial lending.
Explore specific income assessment questions
→ self-employed income calculation
→ permitted business add-backs
→ bonus, overtime, and commission treatment
→ foreign and expatriate income treatment
→ currency conversion assessment
→ probation, contract, and casual income policy
→ unstable income decline conditions
Income assessment interacts closely with
→ living costs and household consumption
→ existing debts and liability load
→ borrowing capacity mechanics
Understanding income in isolation is rarely sufficient.
Lending outcomes emerge from how income interacts with the broader assessment structure.