Payday Loan Declined Find Out Why
Are you out of cash? Is emergency situation prompting you to act rapidly and can the path of applying for a payday loan? This kind of a situation simply shows how badly you are in need of extra cash and how important is to get out of temporary financial crunch. Payday loan is easy to apply and fast to approve. Such loan provided immediate financial backing until you receive your upcoming paycheck. However, getting a payday loan is not that easy as it may sound. Over 50% of payday loan applications are normally declined and there are several things that can contribute to the loan rejection. Is your payday loan declined? Want to find out why? Check out the common reasons below that tells you why a lender may have rejected your payday loan application:-
Too many existing payday loans
Lenders will determine your repayment capability ahead of accepting your loan application. So, as part of application they will look at your current financial situation which includes whether you have any current payday loans that you are paying for, if you have taken more than one payday loan in the past 3 months and they will also check if you are applying for this payday to repay another payday. If you are found to be above any in the case, this could be the possible reason for a loan rejection.
If you are jobless at the moment, then many lenders will question your ability to repay the loan. With no source of income, you may have rejected for a payday loan.
No proof of regular income
Being paid in cash and having no proof of regular employment will make it difficult for you to get the loan approval. Lenders usually look into your bank statements for verifying your income as part of loan approval process. If you don’t deposit the cash you get as a salary into your account after your each pay cycle, then lenders won’t be able to verify your source of income. This is likely the reason of payday loan rejection.
Too many overdrafts on your bank account
When you apply for a payday loan, lenders would like to see your bank statements to verify your income and other financial details. If your bank history shows too many overdrafts on your bank account, then lenders will find it difficult to withdraw an amount from your savings account on the due date. No enough money in your account will look like a major risk and a risky application is more likely to be rejected.
Unable to meet the minimum requirements
Being unable to prove your eligibility to the lenders will turn to payday loan denial. Before applying for a payday loan, you should meet few basic requirements like having regular source of income, be over eighteen years of age and holding a valid bank account that accepts direct deposit of funds. If you can’t meet these simple preconditions, you are likely to be rejected.
Welfare is the only source of income
If you have only welfare income to rely on for all day to day needs, lenders will likely deny approving your payday loan.
Providing wrong information in the application form
When applying for a payday loan, you need to fill in an application form with your basic personal, financial and employment details and then has to submit the form to the lender. Lenders will then verify your details and review your application form. Failing to provide accurate and right details in the form will lead to loan rejection. So, always make sure to provide correct information in the form.
If lenders came to know that you have a habit of spending money on gambling in the past, then they don’t like to put their money at risk and hence will possibly reject your loan application. Lenders today will choose to decline applications from anyone who uses gambling sites regularly.
No restrictions on your spending habits
Your bank account statements will showcase everything you do with your money. Therefore, if you have a habit of spending more than you earn, then lenders will consider you as a risky borrower who might not able to afford high interest rates of payday loan and thus rejects your loan application.
Not suitable for your needs
If a lender finds that your needs are not suitable for a payday borrowing, then your loan application will be rejected. Not every loan option is right for you, so consider all options and understand your needs before you apply for a loan.