Though payday loans are generally considered the easiest way to get a loan and the fastest for that matter, not all people who apply for a payday loan gets approved. The following are some of the basic reasons that people get denied when applying for these types of loans:
Most of the people who get disapproved when applying are those that don’t meet or earn the minimum income required, or ones that don’t have a regular job. Even the most considerate and flexible payday lenders can’t afford to loan money to someone who grosses less than the minimum wage.
Getting a payday loan is more difficult to get for someone who’s self employed. Most lenders don’t usually accept self employed applicants for security purposes. Lenders who do usually require bank statements of previous months to verify stability of income.
Most payday lenders universally require applicants to have a bank account. Payday loans typically are due to be repaid on or the next payday. And usually, money will be deducted from your bank account as agreed. Having no bank account makes it harder for lenders to accept payment though.
As suggested with the term “payday loan”, you must have an income or payday to qualify. Even a healthy savings account will not get you approved if you have no income. But come to think of it, why would you get a loan if you have a good amount of savings right?
What’s always a red flag for payday lenders is having an outstanding loan with other lenders. Someone with several outstanding loans is viewed as a serious risk for returned checks and defaults. Most lenders use verification services to identify applicants having multiple outstanding cash advances, and to confirm the banking information provided. If you ever have a bad record with previous payday lenders, this information will decrease your chances of getting your loans approved.
Bankruptcy (especially in the last year or two) will also make it more difficult for an applicant to get a payday loan. Though the provided information given to the lender is not a credit report, a recent bankruptcy will be revealed. Until you fix your name along with the bankruptcy reflected on your record, you will be considered financially unstable and thus ineligible to get a payday loan from lenders.
In order to qualify for a payday loan, you must be employed for a certain period of time with your current employer, usually for at least three months. Though this requirement is not universal, many lenders will not approve loan applications for newly hired employees. You – as an applicant – must provide information to showing that your employment status is somewhat stable, and new employees are often are still under a probationary period where termination would still be a great possibility.
If you happen to fall into one of the above categories with payday lenders, don’t be dismayed. Not all lenders look closely into these factors when it comes to their approval process. Most full-time employees will qualify for a loan; however, If you find yourself always needing a payday loan, then it might be best to check on your situation. If you have a debt that’s going out of control. Having such loans may push you to a financial disaster, and consequently, they should only be used rarely and carefully.