1. The potential borrower is not holding a job. The payday loan is
a loan against the wage that an employed person receives. Without employment
there is no payday and no capacity to pay the loan.
2. The potential borrower has filed for bankruptcy during the year.
While lenders do not check a personís credit history, they are concerned
about the personís capacity to meet his financial obligations. A bankruptcy
is a declaration that the person can no longer support himself financially.
And one year is not sufficient time to recover from such financial mess.
3. The potential borrower has been employed for less than the required
number of months. Most payday lenders require a client to be holding
his current job for at least six months. If a person has been employed
only for five months and he needs a payday loan, he must search for
a lender who will likely accept his present employment situation. There
are a few lenders who require a client to be employed only for at least
4. The checking account of the potential lender is relatively new.
Payday lenders prefer clients who are fairly stable and a good indication
of this financial stability is a checking account which is at least
three months old.
5. The monthly net income of the potential borrower is less than the
required income. The required income is usually $1,000. If a person
receives less than this, the lenders will assume that he will not be
able to pay any amount that he will loan.
6. The potential borrower has a considerable number of overdraft fees
and/or NSF in his checking account. Such will alarm the lenders because
the NSF and overdraft fees indicate that the person is not a dependable
7. The potential borrower has unpaid payday loans or returned checks.
Similar to the previous situation, these outstanding loans will urge
lenders to deny the application.
8. The identity of the potential borrower cannot be confirmed. This
often happens when the borrower uses a false name or provides inaccurate
information. This also happens when the contact information provided
by the person cannot be used. Obviously, the lenders will not release
funds to an unknown entity.
9. The payday lender cannot easily or directly establish the bank account
information provided by the potential borrower. The lender tends to
assume that the bank account no longer exists or is not valid.
10. And lastly, the potential borrower receives his wage once a month.
Payday loans are short-term loans and the loan period is usually within
18 days. Employees who are paid monthly do not satisfy this requirement.
If a personís loan request is denied but not due to any of the ten reasons
above, he should contact the payday lender and ask for details.