A pay-day loan is a small loan which you can use to cover expenses for an important trip or an unplanned event like a wedding. A payday loan is your quick access to cash without putting anything up for repossession in case you are unable to pay the loan in a given time. You will usually get the loan within 24 business hours as well. However, there have been numerous cases where applicants were denied by not meeting payday loan requirements. If you were denied a loan or you want to know what could be the potential causes that might keep you from getting access to payday, here are some of the reasons which usually become the cause:
- Previous Unpaid Loan:
If you have a previous payday loan which you have not paid back yet, you will not be given further money. A lender will usually do a background check to figure out if you can really afford a loan and if you have other unpaid loans on your account, they will usually think that you are not financially stable enough to pay them back which might keep them from lending you any money. In addition to that, if you have taken a loan out in the past ninety days, it can also decrease your chances of getting another one since that reflects your instability which lenders usually avoid.
- Using One Payday to Pay for Another:
Since lenders ask for some basic information, they will make sure that you are not asking for a loan in order to pay back a previous one which would show that you do not have a stable source of income and will not be able to pay the loan back any time soon. Make sure that you don’t have any unpaid loans previously in order to get a new one.
This is one of the most common reasons for a payday loan application to be denied. If you are currently unemployed or don’t get paid from your employment, chances are that you will not be given a loan. However, there are some lenders who have different criteria and might consider you applicable even when you do not have a job or are currently unemployed.
- Unable to Meet Requirements:
Lenders usually have criteria which lists a number of things that you need to meet in order to borrow money. Every lender has different criteria and sometimes, if you do not get the loan, the lender might not be able to explain why you were rejected properly. They usually think from various perspectives and make sure that you are really eligible for the loan and therefore the requirements are important to meet.
- Inability to Pay Back on Time:
When it comes to payday loans, you are required to pay back within 18 days or so and usually lenders will not give a loan to someone who gets paid monthly as such person might not be able to pay back within that time frame. If you get paid weekly or have another source of income, things will be in your favor. However, inability to pay back on time is also one of the reasons why so many people have been declined a payday loan.
- Length of Employment Time:
Lenders also want to know if you are unemployed, how long you have been unemployed for. If you have not had a job in a long time, you are not likely to pass the criteria to get money. Another thing they want to know is how long you have been employed for if you have a job. If you have had a job for over six months, you are eligible to get the loan.
- Bank Payments:
Lenders will ask to see bank statements from the past three months to check if you have paid into your bank payments. If you have dishonored a payment, lenders will hesitate to lend you a payday loan and your application will most likely be denied. Usually they will ask you to send a copy of your bank statements or see your online banking details to make sure that you have been consistent in paying your bank statements as it shows that you are financially stable and responsible.
- Net Income Requirements:
Lenders need to know that your monthly net income is equal to their requirements. If you get paid below a certain amount, you will be denied the loan. If you make up to $1,000 in a month, chances are that you will be allowed to borrow money as most companies or lenders keep that amount in mind. If you get paid less than that, they will assume that you cannot pay them back therefore your application will be denied.
- Payment to Gambling Sites:
No lender will want to put their money at risk and usually gamblers spend money on online sites which means that they are not responsible when it comes to finances. If you are gambling or have title loans in Las Vegas, lenders will not give a loan to any such person and do a background check to ensure that you are not drowning your money along with theirs as well.
- Failure in Verification:
Lenders need a proper set of information to verify your identity. If you use a fake ID or personal information, your application will be denied. Lenders need to trace back to their borrower’s in case of any unpleasant conditions and therefore, they will not risk giving their money to someone that they cannot properly identify. When you fill our application to apply for a loan, make sure that you enter all the correct information so that lender knows you are an authentic person.
An applicant must keep in mind these things before they apply for a payday loan. Lenders will definitely refuse to lend money to someone that they cannot trust with their money. However, if you think you pass all of these fields and still get denied the loan, try to ask the lender about the reasons. A detailed discussion will help you understand why your payday loan application was denied in the first place.