Some people turn to payday loan lenders because they need money as soon as possible. Some, on the other hand, turn to them because a big lending firm rejected their previous application. Contrary to what most people believe, payday loan companies don’t always approve loan applications.
Although it’s easier to take out a loan on their terms and conditions, it’s still not 100 percent certain that you will get a loan the moment you send out your application. Have you been denied a loan? If so, do you know why? In this post, you will find some reasons why payday loan companies reject applications.
Why did they reject my loan application?
1. You have too many past and ongoing loans. Although payday loan companies ask for fewer requirements, and have a more lenient set of rules compared to banking institutions, they still conduct background checks on clients to see if they are capable of paying back the loan. If you have been borrowing money quite frequently in the past months and still have ongoing loans, it will show on your record, and it will create a bad impression on the lender. It is even worse if you borrow too much, and your income is low. Remember, your income is one of the most important parts of your application, and the lender will look at your income minus the ongoing payments for your loans, mortgages, and other similar credits. Check out www.vivapaydayloans.com to find out more about this.
2. You have poor repayment habits. Paying the money you owe past the due date also goes on your credit report and will affect your credit rating. If you have a habit of not paying unless the company sends out a notice reminding you of your outstanding balance, you have a problem. In the event that you need to borrow money immediately, payday loan companies UK may reject your application because of such a habit.
3. Your loan has been rejected before. Jumping from one loan company to another as soon as your loan gets rejected is not a good idea. Yes, it is important to talk to more than one lender when you plan to take out a payday loan, but this is only to find out who gives the best loan offer. If your loan gets rejected by company A, don’t rush and turn to company B straight away. Denied loans will be revised at the application phase, and this will seriously lower your chances of approval.
To conclude, payday loans are popular because the risk of rejection is not as high as when you take out a long-term loan. But, you shouldn’t be complacent, assuming that payday loan companies will always approve your application. In order to prevent being rejected, avoid the three habits stated above. By doing so, you are not only avoiding having a bad credit rating, but you are also giving yourself better chances of getting an approved loan.