Payday Loans- Why You Might Not Get Approved

While payday loans yield the appearance of quick easily obtainable money, there are several underlying reasons why an applicant may not be approved. These reasons can vary by lender, but there are some standard prerequisites payday loan applicants need to consider. Some lenders will reserve the right to refuse or at least reconsider approval of loans to an applicant who has recently filed for bankruptcy. Usually this pertains to bankruptcy filings that have occurred within the 12 month period prior to the application date. Another circumstance for loan denial may be that an applicant has had multiple bankruptcies regardless of the fact that filing may not have occurred in the last 12 months. An individual applying for a payday loan may also be denied if their current employment is less than 90 days old, or they have had past issues of holding down steady jobs.

If a payday loan applicant’s bank account is new, usually this pertains to accounts less than 60 old they may be denied the loan they apply for. Additionally, bank account with a record of overdrafts can have a negative effect on their financing application. A record of unpaid loans, whether short-term in nature as are payday loans, or delinquencies on credit accounts such as car loans are also grounds for denial. Grounds for being considered a “good risk” by payday loan lenders can include the individual’s net income being less than a thousand dollars per fiscal year. Invalid information or identification that cannot be verified is a definite reason for not being approved a line of credit under the guidelines of payday lending.

In the event that an applicant is granted a direct payday loan due dates for repayment of the borrowed amount usually run over a ten to fourteen day period. Occasionally, if the loan recipient does not have the ability to repay the loan in full, they can be extended to option to repay the accrued interest and fees associated with their loan. Generally, the inability to repay the borrowed amount results in refinancing of the loan. A number of new terms and increase APR’s can be expected with refinancing of payday loans. Borrowers should be aware that the amount required for repayment will exceed the loan amount. For instance, a loan in the amount of $300 dollars will require repayment of around $375. Be wary of whom you are borrowing from and pay close attention to the fees associated with your loan to avoid financial pitfalls