Reasons You Keep Getting Denied for Payday LoansBy Jason Ramin
We have all been through times when we needed more money on hand than what we had readily available. Luckily, we live in a world that revolves around credit cards, credit scores, and—maybe most importantly—loans. Getting money through a loan is easier today than ever before.
One of the most commonly used types of loans, if you’re strapped for money, are payday loans. Payday loans are a quick, easy way to get the money you need. As with all loans, payday loan criteria involves some pretty rigorous rules you’ll need to adhere to. Read on to learn more about what payday loans are and about the qualifications for a payday loan.
What are Payday Loans?
Payday loans are small, short-term loans that come with additional fees and decently high interest rates. If you borrow money for a payday loan, you’re usually going to be required to pay it back by the end of the month or with your next paycheck.
These loans are pretty convenient: You can even get payday loans online. Unfortunately, qualifying for a payday loan can be a little tricky in some circumstances.
Payday Loan Qualification: What You May Be Doing Wrong
We’re going to lay out some of the top reasons you aren’t qualifying for that payday loan in this blog. Keep reading to learn more.
Paid in Cash
If your income is paid to you as cash rather than through direct deposits or checks, you’re going to have a tough time getting a payday loan. Lenders need to be able to see verification that you get paid regularly so they can be assured you’ll pay them back.
Income on Government Assistance/Unemployment
This is another issue along the lines of getting paid in cash. Being able to prove you have a steady source of income is the first and most important thing lenders are going to look for when you apply for a payday loan.
If you live off unemployment or government assistance, lenders won’t consider you for a payday loan.
Already Have Payday Loans
Taking out a payday loan to pay off another payday loan isn’t great. If that’s the boat you’re in, lenders are going to be unlikely to give you another loan because your history of taking out loans and how quickly you pay them back will indicate whether or not you can pay them back on this particular loan.
The premise of a payday loan is to pay it back within weeks of taking it out. Being unemployed will lead lenders to believe you lack a source of steady income with which to pay back the loan.
Don’t Meet Minimum Requirements
There are minimum requirements set by lenders that every borrower has to meet. These can vary, but if you don’t meet their requirements, you won’t qualify for the loan.
You’ve Been Bankrupt at Some Point
Bankruptcy stays on your credit report for years. While it does diminish over time, lenders aren’t going to like to see it on your report, especially if it’s happened recently. If you’ve filed for bankruptcy, you’re likely going to be considered a credit risk.
Overdrawn Bank Account
A dishonored payment happens when a creditor tries to take the money owed them from your account but can’t because there aren’t enough funds in your account to cover the charge. Having a dishonored payment or two show up on your most recent bank statements is going to be a red flag to lenders who are trying to establish your ability to pay back loans.
Poor Credit Scores
It’s possible that some lenders will want to check your credit score before approving you for a loan. Your credit score is another good indicator of your ability to make payments and pay off debts.
Payday Loan Criteria with Personal Loans
There are all sorts of reasons you might need to get a payday loan. Ultimately, if you are reliable and consistent with paying off debt, and if you meet the minimum payday loan qualifications set by the lender, a payday loan can be a good option for you if you need cash fast.