Top 7 reasons why you were rejected for a payday loan | finder.com

Top 7 reasons for payday loans rejections

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Rejected by a lender? Here’s some of the common reasons they denied your application.

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.

1. You have too many existing payday loans

When you apply for a payday loan, lenders want to determine whether you can afford the loan, so as part of your application they will look at your current financial situation.

  • If you have any other payday loans that you’re currently repaying.
  • If you’ve taken out more than one payday loan in the past 90 days.
  • If you are using this payday loan to repay another payday loan.

For some lenders, if any of the above is the case, that’s enough reason to reject you for a loan.

2. You’re unemployed

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. If you don’t meet these criteria, it may be why you were rejected.

3. 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 likely a reason for rejection.

4. 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.

5. 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.

6. 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 year), you may be flagged as high risk and rejected. However, there are still options for people with bankruptcy on their record.

7. You didn’t meet the 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.

The bottom line

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

Don’t forget, there are other options when you’re in need of money

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6 Responses

  1. Default Gravatar
    BrandonApril 2, 2018

    I’m starting a new job tomorrow and I need help get a loan.

    • finder Customer Care
      JeniApril 2, 2018Staff

      Hi Brandon,

      Thank you for getting in touch with finder.

      Since you are starting a new job, you may want to check out this link to see which lenders can give you a personal loan. There are some minimum requirements to apply such as:

      – you need to be at least 18 years old to be eligible to apply.
      – you may need to be employed full-time and you may need to earn a certain amount of income to be eligible.
      – your residence, you will usually need to be a US citizen or permanent resident to be eligible.
      – your credit history.

      If you are a casual and part-time employee, kindly refer to this link to know your loan options.

      I hope this helps.

      Have a great day!

      Cheers,
      Jeni

  2. Default Gravatar
    helpMarch 3, 2018

    if you are denied a loan at a payday loan place can they legally keep your information?

    • finder Customer Care
      RenchMarch 13, 2018Staff

      Hi,

      Thanks for your inquiry.

      Yes, your information is secured and stored with them for their records. If you have provided your banking details, this process is encrypted and secured, your information should not be stored. There’s no need to worry and you may also contact your lender to further inquire.

      Best regards,
      Rench

  3. Default Gravatar
    NathanOctober 12, 2017

    I keep getting declined for a loan.

    • finder Customer Care
      RenchOctober 12, 2017Staff

      Hi Nathan.

      Thanks for reaching out to us.

      I’m sorry to hear that you’re getting rejected when applying for a loan. I suggest not to apply for another loan without further checking it’s eligibility criteria thoroughly because getting rejected from a loan adds negative reports to your credit score.

      You can have a look on this guide for helpful tips on how to improve your credit score and understand how it works. While on this page, you may compare loans that you may compare if you have a bad credit.

      Hope this helps.

      Best regards,
      Rench

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