The 5 Reasons Why Your Payday Loan Application Was Declined

When you’re in a financial pinch, the last thing you want is to be declined when trying to get a payday loan no credit check. However, if your application gets rejected, it doesn’t necessarily mean that you won’t be able to secure financing from another lender. Unfortunately, being declined for a loan from any lender is a common experience. There are many reasons why your application might be declined and as such it is prudent that you understand all of them so that you can avoid being declined again in future. There are various things that lenders check before accepting or rejecting an applicant. These include credit history, income and several other factors that determine whether an applicant is eligible for the loan or not.

Read on to know 5 reasons why your payday loan application was declined:

You Have No or Poor Credit History

Many people get a loan for the first time when they need quick cash and don’t have a credit history. However, lenders depend heavily on your credit history when determining whether or not to approve your application. If you don’t have a credit history, they’ll have no idea how reliable you are or whether you’ll be able to repay the loan. They may also be worried that you don’t know what to expect from the loan process, especially with respect to interest rates and the potential consequences of missing repayments. For these reasons, people with no credit history are less likely to get approved for a loan. If you have a history of missed or late payments, it will make it even less likely that you’ll be approved. This doesn’t mean that you can never get another loan again though. If you have a reliable source of income, then you can try to get another loan again after a few years, once your credit history is established.

Your Income Is Insufficient

Lenders will also look at your income to determine whether you’re a good candidate for a loan. However, they will also rule you out if your income is too low. Lenders are concerned that people who have low incomes are less likely to be able to repay their loans. A lender will assess your ability to repay the loan by calculating your debt-to-income ratio. This ratio is the amount of money you owe each month versus your gross income. Lenders want to see that you have enough monthly income to repay the loan, plus your other expenses. You’ll need a debt-to-income ratio of less than 36% to be approved for a loan in most cases. If your income is too low to repay the loan, you might be able to get a cosigner to help you get approved. A cosigner is someone who will be responsible for repaying the loan if you don’t pay it back. Your cosigner will need to have enough income to cover both of your repayments.

5 reasons why your payday loan application was declined

You Have Already Borrowed Too Much

Borrowing too much can hurt your ability to get future loans, especially if you’re using the same lender to get additional financing. It also raises concerns about your financial situation and ability to repay the loans. Lenders will look at how much money you currently owe and how much money you are likely to be earning. On top of the loans you currently have, lenders will want to see that you can still meet your other expenses. You should be able to pay your household expenses, like your rent or mortgage payment, plus the loan payments you have. For example, if you have $5,000 in monthly expenses and $3,000 in monthly income, you should apply for a loan that is significantly less than your expenses. If you apply for a loan that is close to the same amount as your expenses, lenders may have concerns about your ability to repay the loan.

You Don’t Meet Other Eligibility Criteria

Lenders have their own requirements for issuing loans and will use these to determine your eligibility. They will look at your credit history, income, employment history and more. If there are certain criteria that you don’t meet, then you won’t be eligible for the loan. However, if you meet most or all of their criteria, and have a decent income, they will likely overlook any problems. For example, if you are currently employed by one company, but want to apply for a loan from another company, they may reject your application because you are employed by someone else. You can appeal the decision and ask them to reconsider your application. They may change their decision if you provide them with a valid reason.

The Lender Believes That You Will Default On Repayment

Lenders are in business to make money. If they expect you to default on your loan, they won’t extend credit to you in the first place. They look at your ability to repay the loan and your willingness to repay it. If you haven’t been employed for very long, lenders may wonder if you’ll still be employed in the future. If you’ve been recently discharged from military service, lenders may wonder when you’ll be discharged again. If you’re self-employed, lenders may question how reliable your income really is. Lenders will also look at your financial situation. If your credit history shows that you’re having financial difficulties, they may be less likely to extend you credit. Depending on your situation, you may be able to provide them with more information to show that you are a good candidate for a loan. Fortunately, InstantPaydayLA has made a name for itself as one of the most reputable direct payday loan platforms ever.


When trying to get a payday loan, it is important to be aware of the reasons why your application may be declined. If you have no or poor credit history, have too much debt, or don’t meet the lender’s eligibility requirements, then your application will probably be declined. If you lender believes that you will default on your payment, they will likely decline your application.

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