A fraudulent loan application is a request for credit that deliberately misstates facts a lender relies on. The falsehood may concern who the applicant is, as in identity theft and synthetic identity fraud, or what the applicant earns, owns and owes, supported by forged payslips, altered bank statements or an inflated property valuation. It is a form of application fraud, and it may be committed by the borrower alone, by an organised group, or with help from a broker or a member of the lender's staff.
Lenders separate applicants who never intend to repay from those who exaggerate in order to qualify but mean to pay, sometimes called first-party fraud. Controls sit within credit underwriting: identity and document verification, checks with credit bureaus and fraud databases, direct confirmation of income and employment, device and behaviour analysis, and review of early payment defaults.