Why Do You Keep Getting Denied For Payday Loans Online

Why Do You Keep Getting Denied For Payday Loans Online?

If you keep getting denied for payday loans online, don’t take it too personally. After all, it’s just a computer on the backend making the decisions, right?

Much like a doctors warning in terms of high-cholesterol can be a patient’s wake-up call to leading a healthier lifestyle, loan rejection might just be the wake-up call needed to clean up your credit score if you keep saying to yourself: I need a payday loan but keep getting refused. Think of it this way: Being rejected for a loan may keep you far away from possible consequences in the future.

Common Reasons for Denying your Application

1. Having too many Current Payday Loans

When applying for a payday loan, one of the first thing a lender looks at is whether or not you can afford the loan. Part of the application process entails looking at your actual financial situation.

  • For certain lenders, rejection may be deemed fit if you’re requesting a loan to pay off another financial engagement.
  • You may equally be rejected if you’ve received more than one payday loan within the last 90 days
  • You can also be rejected if you are currently repaying a payday loan.

2. Your Salary is Paid in Cash

As earlier mentioned, lenders need to verify your current financial situation and therefore, being paid in cash can cause a few problems. If a lender can’t verify your income, you have high chances of being rejected. A lender will verify your bank statements and if you aren’t depositing your cash every pay cycle, then you aren’t leaving an online trace, making it impossible to check. If this is your case, then start looking for a lender who can verify your income through your payslips.

3. You’ve Filed for Bankruptcy

Lenders use a lot of information stemming from your current financial situation in order to determine the risk in lending money to you. Having filed for bankruptcy within the last year will most likely have your request stamped as high risk – and you might see yourself rejected. Don’t worry though – if you’re dealing with recent bankruptcy, there are other options for you.

4. You Have No Job

Let’s face it – without stable income, you’re likely to be rejected, for many lenders will question your ability to repay the loan in the first place. Sure, certain lenders may take the time to consider an unemployed applicant, however such an individual must still demonstrate a stable source of income – be it governmental benefits, work or otherwise.

5. Recent Overdrafts

A dishonored payment occurs when a creditor attempts to retrieve money from your account however, there isn’t enough money to cover the fee. If your bank account history displays a history of overdrafts, you’re more likely to be considered a risk and hence, your request rejected.

6. Attaining Minimal Requirements

Most lender’s have a specific list of mandatory criteria for payday loan acceptance on their website. It is highly recommended that you take the time not only to read such criteria, but to make sure that you meet such established standards. If you don’t meet the said list of criteria, you will most likely see yourself rejected by this lender.

Additionally, many lenders equally have an internal scoring system where points are provided in order to determine your eligibility for a loan. If your score isn’t ultimately high enough, this is another reason your request may be denied.

There Are Many Lenders!

Although this has to be completed properly and carefully, it is equally possible to apply for a payday loan from more than one lender. Acceptance criteria can vary from one lender to the next and therefore, despite a previous refusal, you still have chances of being accepted.

Avoid lining yourself up for repeated refusals and don’t keep applying if you have very poor credit score or a very high debt-to-income ratio. Always keep in mind that hard inquiries also directly affect your credit score in a negative way and the mark can last up to an entire year!

In Conclusion

If you’re facing a rejection for a payday loan – look at the bright side. Such a refusal can really give you the opportunity to carefully evaluate your goal and assess how you can obtain the funds in the quickest means possible. You can take advantage of this time to better your credit report and dispute any credit errors if needed. If you need the money right away, you can consider obtaining a payday loan from a different lender or start looking into different options altogether.