The times of economic crisis bring us new challenges. According to some research conducted in the US, almost 80 percent of employees live from one salary to another one – and little do they save. If you see yourself as a part of this statistic – you have probably thought of methods you can help yourself when you urgently need a financial shot. These are situations when we are considering using a Payday loan or other type of short-term loan. However, we all know that applying is not enough since such a loan must be approved. However, many potential clients get denied! Why is this happening and for what reasons – read the text in front of you.
What A Payday Loan Includes And Is It A Good Solution For You?
If we want to define it as precisely as possible – we would say that a payday loan is a type of short-term loan, usually in smaller amounts up to $500. Certainly, in a situation when we are facing numerous financial issues and upcoming inflation – we are often faced with a situation where we run out of money. This is especially the case when we have unforeseen repairs in the house, car failure – or health issues for which we must pay medical bills. These are the situations when we reach for such loans. Still, you should know these are short-term credits that many people can’t afford even if they are eligible for them. Therefore, think twice in advance.
YES, You Can Get Rejected!
We assume that if you are considering applying for such a loan – you have all the necessary information about the repayment method, interest rates, and similar things. If you still think a loan like this would pay off for you – then let’s see if you are a profitable client. Namely, it happens that the applications for such a loan are denied. So why’s that happening?
You Are Denied: WHY?
OK, we already know some fundamental reasons. Let’s say that you must not be under 18 and need to be a US citizen. However, we will remind you that some lenders will not recognize the age limit of 18 – but demand you to be at least 21. Also, you know that you must have an active bank account and that you must have an income source, which, of course, is the basic prerequisite. We assume that you meet basic conditions, but you can visit website that follows this matter and check it out just to validate it. So what can put you in a situation of being turned down for a payday loan?
You are not making enough money
As with any other type of credit line – earnings are what are most relevant when approving. The same situation is with payday loans. Namely, you must have a certain income to qualify for this type of loan. Certain lenders even have a set minimum limit of $800 per month that you must earn to meet the application criteria at all. However, even that does not guarantee your loan approval. Also, many lenders view your social security, unemployment, or disability income – while for others, it means nothing. Therefore, before filling out the application form, find out whether you meet the criteria set by the lender.
You can’t prove the source of your income
That means that you have to be employed. Of course, the lender will check your payments in your bank account, but … There is always BUT! You may be employed – but the form in which you earn an income is not what the lender will accept. For instance, if you’re a freelancer, working on a temporary contract, or similar – there is a high probability that you will be denied upon request for this type of loan.
You have a poor credit history
Your credit image or history is also interesting in the case of getting such a loan. Namely, this is a type of credit, so it is of great importance to every lender to know that you will repay such a loan. If the lender sees that your credit image is poor – he will most likely deny your request. However, even if it doesn’t happen – a bad credit image will make this loan even less favorable due to the higher interest rates you will be required to pay. Then you are the person on whom everything depends – because you have to think carefully about what awaits you in that case and whether you will be able to bear such debt with the interest that is not favorable.
You made payments on online casino websites
Please note that the lender will carefully study your bank account – as well as the payments you have made from it. If he notices you have paid for the services of a web casino – he can easily deny your loan request. Namely, the way the lender thinks excludes all possibilities of risk – and the payment on gambling sites is treated as an indicator of your risky behavior. Therefore, most lenders will decide to respond to your request with DENIED.
You have loans you’re still repaying
This is certainly a good reason to decline a loan application since you are already in loans over your head. That also means that your monthly earning, that is a salary – is already sufficiently burdened. Therefore, you can’t be treated as a suitable candidate for such a loan. As in some other cases, even if you get approval for a payday loan – it will be under less favorable conditions and interest rates that could bury you.
The Bottom Line
Lenders can find so many reasons for refusing a loan application. We have pointed out to you only some that are the most common and typical. The most important thing to say in the story of payday loans – is that you should be well informed about everything before you sign the application and the money goes to your account.