Why Should You Compare Loans
Payday loans are one of the easiest sources of ready and immediate funds to people with bad credit. However, there are several reasons as to why payday loan applications may get rejected. Listed below are some of the factors which may result in non-approval of your payday loan application.
- Several current payday loans: Payday loan lenders may come across the presence of multiple ongoing payday loans when verifying the application of a borrower. The presence of such current multiple loans may cause the lender to reject the application. This is because the presence of several current payday loans is evidence of the fact that the borrowers’ financial status is not great. Payday loan lenders have to be sure that the borrower has the ability to repay the loan and will repay the loan. Hence, borrowers first need to clear off the old loans before applying for a new one, so as not to get rejected.
- No job: One of the main reasons for non-approval of payday loans is unemployment. Lenders need to be sure that borrowers have a regular income source which can be used for repayment of the loan. Thus, if you do not have a job then lenders do not wish to undertake the risk of a default. Hence, borrowers first need to get a regular job before applying for a payday loan.
- Addictions like gambling: Payday loan lenders do not approve loans of borrowers who gamble. It does not matter whether or not you are an occasional gambler and only visit gambling sites once or twice a month. Lenders check bank statements, etc, for payments to gambling sites, etc., to verify any gambling activities. They do not want to act as someone who helps promote the gambling addiction of borrowers and hence do not approve their loans.
- Poor credit history: Most legitimate payday loan lenders reject the applications of borrowers with a really bad credit score. This is because really bad credit scores are indicative of excess indebtedness, high borrowing, and an innate inability to repay loans on time. Lenders do not want to risk a default and hence reject payday loan applications of people with really bad credit.
- Income via only welfare funds: There are many payday loan lenders who offer loans to people who have income only via social security or other welfare. However, most respected lenders approve application only if there is an additional source of income besides welfare. They do so with the belief that in case anything happens to welfare funds, the borrowers will still be able to repay the payday loan.
- Financial record has bankruptcy: Payday loan lenders generally reject the applications of borrowers who have been bankrupt in the past year. This is because they think that the financial status of the borrower may not be strong enough as yet to permit a new loan. It may however be noted that there are many lender who still approve loan from recently bankrupt borrowers, albeit they follow a completely different procedure for that.
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