DirectLoanTransfer
No Result
View All Result
  • DirectLoanTransfer
  • Financial Tools
    • Check Cashing Near Me Locator
    • Payday Loans Near Me Locator
    • Installment Loans Near Me Locator
    • 24 Hour Check Cashing Near Me
    • Short-Term Loans Near Me Locator
    • Car Title Loans Near Me Locator
  • Learn
    • Budgeting
    • Education
    • Finance
    • Loans
Back to DirectLoanTransfer
  • DirectLoanTransfer
  • Financial Tools
    • Check Cashing Near Me Locator
    • Payday Loans Near Me Locator
    • Installment Loans Near Me Locator
    • 24 Hour Check Cashing Near Me
    • Short-Term Loans Near Me Locator
    • Car Title Loans Near Me Locator
  • Learn
    • Budgeting
    • Education
    • Finance
    • Loans
No Result
View All Result
No Result
View All Result
DirectLoanTransfer

Home » Can You Be Denied for a Payday Loan?

Can You Be Denied for a Payday Loan?

Adeola OjierenemKyle DrummondbyAdeola OjierenemandKyle Drummond
25.01.2021
Reading Time: 9min read
0
can you be denied for a payday loan

can you be denied for a payday loan

Whether it’s your car unexpectedly breaking down, a medical bill, or overdue rent, financial emergencies are always at our doorsteps. Payday loans are a source of quick-cash that many people rush to sort out such issues. It’s no doubt why so many payday loan lenders have popped up in recent times to satisfy the huge appetite for the fast-cash fixes.

RELATED POSTS

What Is a Live Check?

Can You Get a Cash Advance on a Debit Card?

What Is A Good Credit Score To Get A Phone?

Recent studies show more than 23,417 payday lenders in the US, serving 32 states across the country. And over 12 million Americans access payday loans annually. Well, this should certainly be expected, especially with the rate at which the cost of living keeps rocketing. 

A payday loan comes in handy when you need that quick financial fix. But, are these short-term loans a sure deal? Can you be denied a payday loan for any reason?

Well, the answer is a resounding “YES.” Your payday loan application may be declined. Let’s dive in and see the reasons why, as well as how you can avoid that loan decline:

But, before that, what exactly are payday loans?

Payday Loans

Essentially, payday loans are short-term funding that helps you to cover abrupt or unexpected expenditures, with a promise to repay by the next paycheck. Since they are short-term and almost immediate, these loans lenders charge extremely high-interest rates (most have APRs of 400% and above).

This means that they should only be taken during emergencies or for some unavoidable expenses. Before you apply for that payday loan, ensure that you know the exact interest rate you are being charged. You might be adding too much unnecessary burden to your paycheck.

Remember, the repayment term for these loans is usually less than a month. Therefore ensure that you can make the payments without much strain.

Common Reasons Why a Payday Loan Application May Be Declined

If you’ve once applied for a payday loan and it was denied, it’s only fair to know why. If you plan to apply for one, you need to be aware of things that might lead to your loan application being rejected. This will help you to plan better.

So, why wouldn’t you qualify for a payday loan?

1. You’ve not Met the Necessary Requirements

While payday loans are perfect fast cash solutions, a borrower still has an obligation to fulfill some requirements to qualify for a loan. Different lenders will have different requirements to be met, although there are some basic minimums that almost every payday lender will demand:

For starters, a borrower must be of 18 years and above. This makes you an adult in most states, although some platforms might raise this age bar to 21 years.

Second, you must be an American citizen and reside in a state that allows for payday loan lenders’ operation. Without meeting these requirements, your loan application will most likely be declined.

Solution

This one doesn’t have an easy way around it. For the age limit, you have to prove that you are above the required age limit. But for the residency, you can certainly shift to a state that permits payday loan businesses.

2. No Evidence of a Steady Source of Income

When borrowing any loan, the payday lender must verify that you have some steady earnings each month. Otherwise, how will they know that you can make your loan payments on time, plus the high-interest rate they charge?

Being able to prove your earnings is one step towards getting that loan that you so much need. And, not having that evidence means that your loan will keep getting rejected. Some lenders could also put a cap on the minimum monthly earnings for borrowers, something you need to confirm before applying.

Solution

If you don’t have bank records to prove your earnings, you may need an alternative to get that loan approved. For instance, if you are employed but paid in cash or are self-employed, you may still be able to prove your pay. But how?

  • Keep a log – this is especially for people who receive tips regularly. IRS accepts tip logs, either written or electronic, as a means of proving one’s income. This is acceptable for tax purposes, and you can use it as proof of income to lenders, hence avoiding the disappointing decline.
  • Third-party contacts – someone else reliable, such as your employer or even a landlord, might be able to prove you have some income.
  • Invoices – keeping copies of invoices for work done might also help show how much money you earn monthly or yearly.
  • Tax papers – independent contractors and self-employed individuals working for other businesses or people are given a 1099 form at the end of every year. This form shows in detail the total amount you’ve been paid for that year – if it exceeds $600. This can be another proof to the lender that you do earn.

3.  Unemployment

Not being employed is also one of the major reasons why payday loan applications keep getting rejected. Most lenders will request proof of employment to ensure that you have a salary to help service your debt.

Remember, when applying for a payday loan, it’s an agreement you’ve entered into with the lender. The lender agrees to advance you some cash to promising that you’ll pay the amount back, with some interest before a certain date. Failure to repay the money, the lender will certainly lose money.

For this reason, the lender needs assurance that you have a stable flow of income to enable you to meet your obligations. Employment is one sure way for a payday lender to be guaranteed repayment for the money they lend out. Having a job means you are less likely to default on loan payments than a person who doesn’t have a job.

Solution

There is no special hack around this, except getting employment. This will guarantee the lender that you are not a risky venture to throw money on. So, if you need a payday loan, ensure you get employment first, whether full-time or part-time.

Alternatively, if you are in between jobs, you can prove that using your bank statement. Through your statements, the lender can see whether you have some other income source – for instance, passive earnings. Also, check whether the lender can consider your unemployment and welfare incomes.

4. Poor or Bad Credit Score

Your credit history is certainly a major determinant of your loan’s approval or decline. While we have payday loan lenders who give loans to individuals with bad credit score, most lenders use a credit check to verify your eligibility. Your credit score must be positive if you are dealing with a legit, reputable payday loan lender.

The whole reason for lenders to look into your credit history in the first place is to ascertain that you are credit-worthy and minimize their risk of losing money.

Will you be able to repay their money plus the accrued interest? Or are you among those individuals who default on every loan they get?

“Bad” or “Good” credit score will clearly show this. Many lenders will do a credit check to get a brief credit report before your loan is approved. Poor credit score means that the lender’s money will likely be lost through unmet loan payments, which lenders like to avoid.

Remember, for you to have a bad/poor credit score, it means that you either don’t pay for things on time or you are too much in debt. Either way, this may not favor your new loan application.

Solution

The best way to get your loan application approved here is to make sure that you’re back on the good credit books. You can do this by evaluating your borrowing and expenditure and identifying areas that are negatively affecting your credit score.

For instance, avoid too much debt, make timely payments on your obligations, and clear even the smallest bills on time. Ensure that you borrow responsibly and avoid relying too much on debt. This will help you to maintain a clean credit history and subsequently lead to your loan being approved.

5. Too Low Income

A payday loan lender will put a cap on the minimum monthly income a borrower ought to have in most cases. For example, most lenders need you to have a monthly income of not less than $800. Also, some rules imposed by the Obama administration, back in 2017, require that payday loan lenders determine the capability of a borrower to pay a loan but still have enough money to meet their basic needs.

This means that you may be employed and have proof of income, but the amount you earn is not enough to warrant you a payday loan. For this reason, you need to ensure that you have met the minimum income limit before you apply for the loan.

In some instances, the lender may consider unemployment and welfare incomes, so long as they are above the minimum requirement. Always ensure that you have enough information about the lender’s minimum income requirements before applying for that payday loan.

Solution

Ensure that your earnings are adequate. You may do this by getting an extra part-time job or a side hustle that adds to your overall earnings.

6. Lack of a Checking Bank Account

For your loan to be approved, many lenders will request a post-dated check from you or completion of an ACH withdrawal. This guarantees them that they will get their money on the agreed date, without delays.

These two actions need you to have a checking or savings bank account. And, in case you don’t, your loan application may be denied by most lenders.

Solution

Have a checking account. That’s right! Since this is a requirement for almost every lender, you must have an active account. This might be the only reason why your loan application is being denied.

7.  Unsettled Paycheck Advances or Payday Loans

When planning to apply for a payday loan, it may be prudent that you don’t have other unpaid payday loans – unless your bank statement shows that you can still meet your obligations.

If you have some unsettled debts, lenders may be wary of approving your application, and it may be denied altogether. And, it doesn’t matter whether the unpaid debt is past the due date or current. The fact is, payday loans will add to your obligations, something that only adds to the risk of defaulting, on some, if not all.

Solution

First, you may consider settling all your unpaid payday loans and paycheck advances before applying for new ones. Better still, ensure that your earnings are adequate to support both the unpaid loans and the one you are applying for.

If your earnings support that, the lenders may still advance you the loan as the risk is not too high. You may still be able to make your payments.

Share4Tweet2Pin1
Adeola Ojierenem

Adeola Ojierenem

Financial Writer
Adeola Ojierenem is a Financial Analyst and Chartered Professional Accountant. When she's not spending time with family or crunching numbers in excel, she loves to write and educate people about personal finance and financial literacy through her website, palmetcedar.ca

Kyle Drummond

Kyle Drummond

Financial Expert & Personal Advisor
I work with high net worth individuals and families, helping them achieve their financial goals. My approach begins with a conversation, evolves into a detailed, holistic financial plan and continues with the implementation of financial solutions. I focus on individual, customized investment strategies, risk management, and asset transfer strategies.

Related Posts

img blog live check
Education

What Is a Live Check?

15.02.2021
can you get a cash advance on debit card
Budgeting

Can You Get a Cash Advance on a Debit Card?

18.01.2021
what is a good credit score to get a phone
Education

What Is A Good Credit Score To Get A Phone?

16.12.2020
can you get an extension on a payday loan
Loans

Can You Get An Extension On A Payday Loan

17.11.2020
how can i raise my credit score article preview
Education

How Can I Raise My Credit Score?

26.10.2020
how can i get a quick loan
Finance

How Can I Get A Quick Loan?

28.09.2020

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended Stories

how do i get emergency money

How Do I Get Emergency Money?

10.09.2020
small business grants for veterans

Small-Business Grants and Resources for Veterans Explained

16.12.2020
how can i raise my credit score article preview

How Can I Raise My Credit Score?

26.10.2020

Popular Stories

  • can you go to jail for not paying a title loan

    Can You Go to Jail for Not Paying a Title Loan?

    34 shares
    Share 13 Tweet 8
  • Can You Get a Cash Advance on a Debit Card?

    24 shares
    Share 10 Tweet 6
  • Can You Pay A Credit Card With Another Credit Card

    27 shares
    Share 10 Tweet 7
  • A Simple Guide on How To Read a Pay Stub

    23 shares
    Share 4 Tweet 3
  • What Is a Live Check?

    10 shares
    Share 4 Tweet 3
DirectLoanTransfer

We bring you the best financial tips and wiki on the web. Upgrade your financial knowledge with ease.

Industry Insights:

  • Bad Credit Loans
  • 200 dollar loan
  • 300 dollar loan
  • 500 dollar loan
  • Payday Loans Online Same Day Deposit
  • Instant Cash
  • Title Loans
  • Quick Cash
  • Emergency car repair loans
  • Small loans online
  • Short-term loans online
  • No credit check loans

Recent Posts

  • What Is a Live Check?
  • Can You Be Denied for a Payday Loan?
  • Can You Get a Cash Advance on a Debit Card?

The material contained at driectloantrasfer blog is given free of charge and can only be used for educational and instructional purposes. We are not a credit restoration organization as specified by federal or state law since we do not offer credit repair services or guidance or assistance on "rebuilding" or "improving" your credit. Articles written for this blog are provided for general information purposes only and are not substitute for individualized professional advice. Articles published by the DirectLoanTransfer Blog are not direct recommendations about how to change or attempt to boost your financial score, history, or rating.

  • About Us
  • Contact Us
  • Careers
  • Privacy Policy
  • Terms of Use
  • Disclaimer
  • CCPA
  • Unsubscribe

Copyright © DirectLoanTransfer - 2021. All Rights Reserved.

No Result
View All Result
  • DirectLoanTransfer
  • Financial Tools
    • Check Cashing Near Me Locator
    • Payday Loans Near Me Locator
    • Installment Loans Near Me Locator
    • 24 Hour Check Cashing Near Me
    • Short-Term Loans Near Me Locator
    • Car Title Loans Near Me Locator
  • Learn
    • Budgeting
    • Education
    • Finance
    • Loans

Copyright © DirectLoanTransfer - 2021. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In