Why are People Being Denied Payday Loans?
by Guaranteed PaydayLoanz GuaranteedpaydayloanzPeople Are Denied Payday Loans- Here’s Why!
Payday
loans are a means for rescue when one is short on money and cannot apply
for a traditional loan for various reasons. When one gets rejected by other
lenders such as conventional ones due to not being able to offer collateral or
due to having a bad credit rating, they opt for payday loans since these loan
lenders are more lenient than the others. However, do payday loan lenders offer
cash advances without any terms and conditions? Let’s first have a look at
scenarios in which they do offer loans:
Bad credit:
A huge number of Americans possess credit scores that are
average or below that. That means that they hold credit ratings below 600. This
can make it difficult for them to get a loan from a traditional or a
conventional lender. Traditional lenders often reject borrowers whose credit
scores are below 600 since they depend on the previous financial transactions
and repayment histories of borrowers in order to come to a conclusion about
whether they qualify for a loan with them or not.
However, payday loan lenders do not depend on one’s credit
rating in order to offer a loan to him/her. That’s because they do not believe
in one’s past financial transactions and repayments in order to give them a
loan. They instead ask for the individual to have a stable monthly income which
is the main factor that determines whether or not one can receive a loan from
them.
Collateral:
If a bad
credit holder seeks a loan from a traditional lender, it is most likely
that the lender will turn own the request. However, average credit rating
holders can get a chance to receive a loan from these lenders provided they
have something to offer as collateral. That means, they have to put something
as valuable as a car or their house at stake in order to get a loan from them.
Not everybody has a vehicle of their own or a house that they own to offer to a
lender as security, which makes it difficult for them to get a loan. However,
payday loan lenders offer unsecured cash advances to their borrowers. This
makes life easy for those who have bad credit but nothing to offer as security
or don’t want to risk something by putting it up as collateral. Again, as long
as the borrower has a stable income, it shouldn’t be a problem for the lender
to offer him/her a loan.
Now, let’s look at situations wherein payday loan lenders
deny loans:
No stable income:
From the very beginning of this article, we have been
enforcing the idea of one having a stable income in order to receive a loan
from a payday loan lender. That’s because that’s the main requirement in order
to receive a loan from them. If one doesn’t have a stable income, he/she shall
not qualify as a trusted borrower with a payday loan lender. Payday loan
lenders concentrate on the current financial status of the borrower in order to
lend a loan. So, if there is no monthly income which is stable, there is no
chance of one receiving a loan from them.
Bank account:
This is majorly directed towards online loan lenders. Online
payday loan lenders require their borrowers to have a checking account through
which they can both deposit as well as withdraw cash. The whole idea of
applying for an online loan is to avoid the hassle of paperwork and more that
comes with applying with a store-based lender. Online loan lenders also like to
avoid the hassle of not being repaid on time, which is why they withdraw cash
from your account on the due date. Of course, they do inform their borrowers
before doing so, but it is a much more convenient option even for the borrower
who gets to avoid keeping a track of the due date as well as travelling to a
store just to pay back a loan. In order to have a smooth lending and borrowing
experience with a payday loan lender who’s based online, it is important for
you to have a valid checking account.
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Created on May 13th 2021 00:23. Viewed 234 times.