Top 11 reasons for a denied payday loan

Wondering why your application wasn’t approved? We take you through some of the most common reasons why a lender may have decided not to work with you.

Can you get turned down for a payday loan?

Yes, although it doesn’t happen often, you can get turned down for a payday loan. The main reasons lenders deny payday loan applications is that they think you can’t afford to pay it back. Factors like too many negative marks on your credit report can also get your payday loan application rejected. Even if your application has been denied though, you might be able to qualify for a payday loan with another provider.

But first, take steps to ensure you won’t get rejected the next time around by reading about the top 11 reasons payday loans get declined.

1. You already have a payday loan

In most provinces, it’s illegal to offer a payday loan to someone who already has one. It’s also often illegal to use a second payday loan to pay off one you already have. Even if it isn’t a law, many lenders have a policy that doesn’t allow you to have more than one payday loan out at a time.

2. You didn’t pass a credit check

Payday lenders generally accept bad credit and some don’t even run a hard credit check. But many will still look at your credit report when you apply. Having a low credit score in itself won’t necessarily get you denied. But some negative marks like judgments and bankruptcies can get your payday loan application declined.

3. You don’t have enough regular income

If you don’t have a regular source of income, many lenders will question your ability to repay your loan. While there are lenders who consider unemployed applicants, your acceptance usually hinges on a source of income – whether that be steady work or government benefits. Often, lenders require you to bring in at least $800 – $1,000 a month to qualify for a loan. If you don’t meet these criteria, it may be why you were rejected.

4. Welfare is your only source of income

Although there are lenders who accept borrowers on welfare, you’ll generally need supplementary income. If you only have welfare payments, this is could be a reason for rejection. Read our guide to getting a payday loan while on welfare to learn more.

5. You don’t have a Canadian bank account

While it’s possible to find a payday loan without a bank account, it’s not easy. Most payday loan lenders prefer to transfer the funds to a Canadian bank account and withdraw your payment directly from your account on the day it’s due. And even lenders who offer cash loans often look at your bank statement when underwriting your application.

6. There are overdrafts on your bank account

When you apply for a payday loan online, lenders may ask to see a copy of your latest bank statements. If your history shows that you’ve dishonored payments – that’s when a creditor has attempted to debit from your account and there wasn’t enough money — you look like a risk, and a risky application is more likely to be rejected.

7. You’re paid in cash

Being paid in cash can make it difficult for you to be approved. Lenders need to be able to verify your income, usually through your bank statements. If you don’t deposit the cash you receive into your account each pay cycle, then lenders won’t be able to verify it. Instead, you’ll need to find a lender who is willing to use your payslips as verification. If a lender couldn’t verify your income, this is a likely reason your application was rejected.

A similar problem can apply to people who receive payment in cryptocurrency. Many lenders won’t check your crypto wallet to verify your income.

8. You have a bankruptcy on your record

Lenders use your financial situation to determine the risk in lending to you. If you have a recent bankruptcy on your record (within the past 7 years), you may be flagged as high risk and rejected. However, there are still options for people with bankruptcy on their record.

9. You aren’t a Canadian citizen or permanent resident

In many cases, you must be a Canadian citizen or permanent resident to qualify for a payday loan. Even if you’re here on a work visa or student visa, payday loans may not be an option for you. That’s because payday lenders likely won’t accept cosigners to help you meet the residency requirement.

10. You aren’t old enough

In all provinces the legal age of the majority is either 18 or 19 years old. Some lenders also have their own minimum age requirements and won’t lend to anyone under 19, for example. Before you apply, make sure you aren’t too young to take out a loan.

11. You didn’t meet other minimum requirements

Before applying for a payday loan, you should make sure you meet the minimum criteria listed on the lender’s website. These criteria are set to establish who the lender will accept. If you didn’t meet all of the criteria, this is likely why you were rejected. In addition, lenders also have internal scoring systems where they allocate points to help determine your eligibility. If your score doesn’t add up, your application is unlikely to be approved.

How to get a payday loan after being denied

The first thing to do is double check your application to make sure all the information is accurate and that there aren’t any typos. Let’s say your monthly income is $1,000, but you accidently wrote $100 on the application – that could easily get your application rejected, but is also an easy fix when you reapply.

If all the information on your application is accurate, you still might be able to get a payday loan after being denied by applying with a lender that has looser requirements. Read our guide to easy-approval payday loans to learn more.

But if you were denied because you can’t afford the loan, there are many payday loan alternatives you can look into instead for more affordable options.

What are the most basic payday loan eligibility requirements?

Although all lenders have their own unique qualification requirements, they typically include the following:

• Be the age of majority in your province or territory (18 or 19)
• Be a Canadian citizen or permanent resident
• Have a recurring income
• Have a bank account

Compare payday loans

Ready to re-apply? Check the websites of any lenders you’re interested in to confirm they operate in your province or territory of residence.

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Name	Product	Loan Amount	Loan Term	Interest Rate	Turnaround Time	Serviced Provinces	Offer	Table description
GoDay Payday Loan GoDay Payday Loan		$100 - $1,500	Up to 62 days	Varies by province	As little as 2 minutes with INTERAC e-Transfer®	AB, BC, MB, NB, NS, ON, PEI, SK		To apply, you'll need to be a Canadian resident over the age of 18 with a valid email address, phone number and an open bank account with a Canadian bank or credit union.	Go to site View details	Compare	loading Fetching your data...
iCASH Payday Loan iCASH Payday Loan		$100 - $1,500	7 - 62 days	Varies by province	As little as 2 minutes with INTERAC e-Transfer®	AB, BC, MB, NB, NS, ON, PEI	Get up to 20% in cash back once your payday loan is fully repaid. Conditions apply.	Same day cash up to $1,500 for car payments, rent, mortgage, home & appliance repair, and more. 24/7 instant approval and e-Transfer funding. Income of at least $800/month required.	Go to site View details	Compare	loading Fetching your data...

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Bottom line

There are multiple reasons why you might have been rejected for a payday loan, but don’t be discouraged. You can review your application to make sure you didn’t miss any information before you apply with another payday lender. Not every loan option is right for you so be sure to consider all your options and compare the costs before applying again.