When it comes to payday loans, not all lenders require a credit report. However, if you have bad credit or a high debt-to-income ratio, you may be denied a loan. The most common reasons for loan denial are credit score, income, and past loan history. While many payday lenders serve borrowers with lower-than-average credit scores, some may not lend you money if they know you won't be able to repay the loan. The main reason why lenders reject applications for payday loans is that they believe you won't be able to pay back the loan.
A very low score on your credit report, for example, can lead to your payday loan application being denied. However, if your application was rejected, you can still get a payday loan from another lender. Before applying, check out the most common reasons why payday loans are denied to make sure you won't be turned down again. A cash advance does not directly affect your credit score, but the balance of the cash advance will be added to your credit card debt. This can hurt your credit score if your credit utilization ratio is too high.
This ratio reflects the amount of available revolving credit you are using. A high ratio can damage your credit score, especially when it exceeds 30%.If you try to borrow more than you can afford, the lender may deny your personal loan application. This is because the amount the lender approves you for is based on your income and other debt obligations. After reviewing your finances, the lender may decide that you do not qualify for a loan of a certain amount.
You can talk to your payday lender and ask them why your payday loan isn't approved. Some lenders will tell you why your loan application was rejected. If you understand the reasons why you were denied, you can take steps to increase your chances of being approved. If you find that your payday loan has been declined due to existing loans, you must pay them off first. If you continue to be denied payday loans online, evaluate the reasons why your loan application is declined. If you know that you'll have the money to repay the loan on time and don't have other financial options available, a payday loan may be able to help with a cash emergency.
But cash advances come at a price, so don't rush into this decision without evaluating all other alternatives. The annual percentage rate (APR) charged for a cash advance may not be the same as the APR for purchases; it can be found on your credit card agreement or by contacting your card issuer. Read the cardholder agreement to learn how much a cash advance will cost before considering borrowing one. If you need a loan but are denied one, it might be worth looking into broker sites (such as Cash Lady) or comparison sites. When taking out a cash advance from a credit card with an outstanding balance, payments will go towards paying off the purchase balance (which has a lower interest rate) before being applied to the cash advance balance (which has a higher interest rate).
Unlike an unsecured loan, a secured loan is backed by collateral such as a car title or cash deposit. If you live in a state that only allows one borrower to have one payday loan at a time, any outstanding loans could be grounds for refusal. You don't get this luxury with cash advances; interest starts accruing on the day you receive the cash advance. Military members are also not eligible for cash advance loans due to the Military Loan Act (MLA). Some of the reasons why your loan application might be denied include having a low credit score or low credit profile, having a high DTI ratio, insufficient income, unstable employment, or mismatching between the purpose of the loan and the lender's requirements for it.
A cash advance could also affect your credit if taking on high-interest credit card debt makes it difficult for you to keep track of bills. And even those who offer cash loans often look at their bank statement when signing up for their application.
