Have you applied for a $6,100 payday loan and got rejected? Here are the top possible reasons why a lender had arrived at such an unfortunate decision. Read on and take note of what can you do differently next time.
You’ve already taken out a lot of payday loans
During an application process, among other info that a lender may require, they will ask for proof of your financial situation. Some providers don’t work with clients that have any other loans that they’re repaying, or that have taken out more than one payday loan in the past 90 days.
You’re using this loan to pay off the previous one
Similar to the previous reason, some providers reject clients whose intention is to pay off current debt. If you have a bad credit history though, visit Bad Credit Loans in Georgia to solve this issue.
You don’t have a steady job
It is only logical for a lender to question one’s ability to pay back if they don’t have a source of income. There are of course companies and private providers that do consider unemployed clients, but their terms are quite different from the regular ones. Most lenders, however, wouldn’t work with you if you don’t have a steady income, be it a job or a pension or any other benefits.
Your only income depends on welfare
Thought government benefits are considered an eligible source of income, lots of providers still might reject a client whose ability to pay off the loan depends only on welfare.
Your bank account has an overdraft
During an application process, you might be asked for a copy of your bank statement. If the history shows that there was a time when a creditor tried to debit from your account and could not do it due to the lack of funds – your case doesn’t look good.
You get your income in cash
Providers want to verify your income, and the surest and easiest way to do so is through bank statements. Therefore, if you receive money in cash and don’t deposit them into your account each pay cycle, the lender wouldn’t be able to make sure if your income is steady enough for them to consider your application.
You’ve been bankrupt
If you’ve gone bankrupt any time within the past year, you pose a high risk for the lender and therefore will most likely be rejected.
You’re not eligible
This may mean a variety of things – maybe you’re not old enough to take out a loan in your state, maybe your credit history is just not up to par, or the collateral you’re using is not valuable. The truth is that providers have a scoring system where they rate you in terms of eligibility, and if the score is poor they won’t accept your application. In case bad credit score makes you uneligible – visit Bad Credit Loans in Hawaii.
There are plenty of reasons for a particular lender to reject you. Carefully consider all of the above and determine which ones are applicable to you, take measures to improve on them and then try to apply again. Before signing up for a loan though, consider the alternatives that may replace the online payday loan in terms of helping you with the financial situation:
- Charities, local non-profit and government-funded agencies, churches, etc.
- Extensions on your payments.
- Side jobs, additional shifts at work or more projects.
- Asking for an early paycheck or a raise.
- Asking a friend or a relative for help.
There are options for you in case of a financial emergency, that don’t involve getting into debt, so be wise, budget carefully and go into the lending deal with enough knowledge and a cool head.
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