When the Payday Loan is Denied
Most people who submit requests or applications for payday loans
are approved during the day and they receive the amounts they
loaned during the next day. This is because lenders demand only
the minimum requirements. There are, however, few instances when
the loan application is denied. Here are ten reasons why a
person's loan application is not approved.
1. The potential borrower is not holding a job. The payday loan
is a loan against the wage that an employed person receives.
Without employment there is no payday and no capacity to pay the
loan.
2. The potential borrower has filed for bankruptcy during the
year. While lenders do not check a person's credit history, they
are concerned about the person's capacity to meet his financial
obligations. A bankruptcy is a declaration that the person can
no longer support himself financially. And one year is not
sufficient time to recover from such financial mess.
3. The potential borrower has been employed for less than the
required number of months. Most payday lenders require a client
to be holding his current job for at least six months. If a
person has been employed only for five months and he needs a
payday loan, he must search for a lender who will likely accept
his present employment situation. There are a few lenders who
require a client to be employed only for at least three months.
4. The checking account of the potential lender is relatively
new. Payday lenders prefer clients who are fairly stable and a
good indication of this financial stability is a checking
account which is at least three months old.
5. The monthly net income of the potential borrower is less than
the required income. The required income is usually $1,000. If a
person receives less than this, the lenders will assume that he
will not be able to pay any amount that he will loan.
6. The potential borrower has a considerable number of overdraft
fees and/or NSF in his checking account. Such will alarm the
lenders because the NSF and overdraft fees indicate that the
person is not a dependable borrower.
7. The potential borrower has unpaid payday loans or returned
checks. Similar to the previous situation, these outstanding
loans will urge lenders to deny the application.
8. The identity of the potential borrower cannot be confirmed.
This often happens when the borrower uses a false name or
provides inaccurate information. This also happens when the
contact information provided by the person cannot be used.
Obviously, the lenders will not release funds to an unknown
entity.
9. The payday lender cannot easily or directly establish the
bank account information provided by the potential borrower. The
lender tends to assume that the bank account no longer exists or
is not valid.
10. And lastly, the potential borrower receives his wage once a
month. Payday loans are short-term loans and the loan period is
usually within 18 days. Employees who are paid monthly do not
satisfy this requirement.
If a person's loan request is denied but not due to any of the
ten reasons above, he should contact the payday lender and ask
for details.