Top Five Reasons Why Payday Loan Companies Deny Your Loan
Payday loans are a convenient way to access fast cash, and they are also very easy to qualify for because there is no credit bureau check. However, not everyone is promised approval of a payday loan.
Before applying for a payday loan, you should research the rates and loan terms of the payday loan company, to be sure that you are capable of meeting the payday loan terms. You should also verify that you can meet the eligibility requirements of that payday loan company.
Each payday loan company has their own list of requirements, but in general there are five things that could disqualify you from receiving a payday loan. Counting them down, they are:
5. Problems Reflected in Your Checking Account
While payday loan companies do not do a credit check, there are certain red flags that can be raised when viewing your bank statement.
If you do not have a bank account, or you have not had an open bank account for a minimum amount of time (similar to the employment terms) then this will automatically make you ineligible for a payday loan.
If your bank account shows a history of insufficient funds or overdrafts, a payday loan company could deny you.
4. Loan History
If you have one or more existing payday loans still open, even with another payday loan company, this could disqualify you from approval of a payday loan.
If you are using a payday loan to pay off other payday loans, you are using the payday loan service irresponsibly and most payday loan companies frown upon this. Also, if you have a history of faulting on payday loans, or even using payday loans frequently, this can disqualify you from approval of a payday loan.
3. Reliability
Most payday loan companies require that you have been employed for a minimum amount of time. While the minimum employment requirements vary from company to company, these expectations exist for fairly obvious reasons. You will not be able to get a payday loan if you just started your job last week, and also if you have been employed ‘on and off’ this has an effect on your reliability.
Remember that even though a payday loan company has lower qualification standards than other loan sources, and (in some cases) lower rates than ‘bad credit loans’, they are still providing a loan service, so you must be able to prove that you are a reliable person who is capable of repaying your payday loan.
2. Lack of Documentation
Payday loan companies require certain documents, which include proof of income or employment, proof of a checking account, and proof of identity. If you are unable to provide these documents, then you a payday loan company will be unable to approve you for a loan.
1. Dishonesty
Honesty is important when you are applying for a payday loan. If you lie about income, or lie about your identity, you will probably not be trusted to loan money to.
In summary, your payday loan application could be denied at the first sign of inability to repay your payday loan. If you are having difficulties making ends meet, you should consult with a financial advisor and learn responsible budgeting. Relying on a payday loan is not an “easy way out”, because when you borrow money you are required to repay that loan.
