When your car breaks down or a family member needs urgent medical attention, you can find yourself in need of money if you’re one of the many individuals who live paycheck to paycheck and haven’t saved money for emergencies. Payday loans are frequently used by people in times of financial difficulty. Even if applying for payday loans is more hassle-free than for personal loans, acceptance is not assured.
Lenders‘ one justification for rejecting applications for payday loans is that they think you won’t be able to pay back the amount. Your payday loan application can be denied, for example, if you have a bad credit score. You might be able to obtain a payday loan from a different provider if your application was denied. Check out the most frequent reasons payday loans are rejected before applying to be sure you won’t be rejected again.
1. You Don’t Earn Enough Income Consistently
The federal government no longer requires payday lenders to authenticate your ability to repay because you don’t consistently make enough money. However, some jurisdictions continue to undertake affordability assessments, and some lenders set minimum wage criteria. But if you are unemployed or have a very low income, you risk being rejected.
2. You Failed the Credit Check
Payday lenders may not do a hard credit check or may tolerate poor credit. However, when you apply, some lenders may check your credit report. Even if you have a low credit score, you might still be approved for credit. Your application for a payday loan might be rejected if you have certain adverse marks, such as bankruptcy.
3. You Don’t Have a Bank Account
Although it is challenging, it is possible to obtain a payday loan without a bank account. Most lenders often deposit money into your account and take it out on the due date. And before choosing whether to approve your application, individuals that sell cash loans will check your bank account.
4. Your Bank Account Contains Overdrafts
When you apply for a payday loan online, lenders may need to see a copy of your most recent bank statements. Anytime a borrower attempts to withdraw money from your account, and there isn’t enough money, you appear to be a concern to a lender, regardless of whether you have a history of dishonored loans.
5. You Are Paid in Cash
If you receive payment in cash, it can be challenging to verify your earnings. This is so that they can determine whether you have a regular monthly income by looking at your bank statement.
Any company may request that you only be billed via direct deposit.
6. You Don’t Pass the Minimum Age Requirement
You are under the legal age limit to obtain a payday loan in most states, which is 18. A person under the age of 21 may not receive a loan from various lenders due to their age limits.
Before applying, be sure you are not too young to take out a loan.
You are prepared now that you are aware of the possible grounds for rejecting your application for a payday loan. We wish you luck!