To write a salary certificate for a loan application, include the employer's official letterhead, employee details (full name, position, and dates of employment), gross monthly salary, payment frequency, and employer contact information. Sign and date the document, and ensure it specifies the validity period (typically 30 days). Highlight net income if required by the lender.

Employers issue salary certificates to verify a borrower's income stability, a critical factor for lenders assessing repayment capacity. According to the Federal Reserve, 68% of U.S. lenders require employment verification as part of loan underwriting, with accurate salary documentation directly influencing approval rates. A 2022 FDIC report found that 42% of loan denials stem from discrepancies in employment or income claims, underscoring the need for precise, official records. Salary certificates reduce fraud risks by providing a standardized format, aligning with regulations like the Equal Credit Opportunity Act (ECOA), which mandates fair income verification practices. Lenders often reject informal proof (e.g., pay stubs alone) due to insufficient legal weight; employer-issued certificates, signed under penalty of perjury, establish credibility. Additionally, specifying net income aligns with IRS guidelines, as lenders typically evaluate disposable income for debt-to-income ratios. A 30-day validity period ensures the document reflects current earnings, critical for loans with short terms or variable interest rates. Financial institutions like Fannie Mae and Freddie Mac mandate such documentation to comply with secondary market standards, reinforcing its necessity in both underwriting and regulatory compliance.