Factors Responsible for the Rejection of Most Payday Loan Applications

Factors Responsible for the Rejection of Most Payday Loan Applications

Have you ever applied for an easy payday loan only to have it rejected? Well, there could be a number of reasons why you are ineligible to receive the loan. Knowing what these reasons are will enable you to quickly resolve the problem and reapply as soon as possible. Factors responsible for the denial of most payday loan applications include:


The main reason for most loan application rejections is unemployment. A reason which, it must be mentioned, is very justifiable. The rationale behind a moneylender loaning you money is that you’ll pay it all back with interest once your paycheck comes in. If it so happens that you don’t have any money coming in, then lending you money becomes a very risky decision. If this happens to be the position you’re in, the best solution is to get a job before reapplying.

Having multiple payday loans

It’s not uncommon for moneylenders to discover that their applicants have taken out multiple payday loans from different lenders. Such findings have a way of making a lender very jittery about handing their money to such individuals. When handing out money to an applicant, lenders need the assurance that you have the ability to pay it back in the stipulated time.

An applicant who has several loans is one whose finances are already a mess. Moreover, such a financial history could hint a questionable activity. Should you find yourself in such a scenario, the best thing you can do is to focus on clearing your current debts first.

A bad credit score

There are a number of lenders out there who have no reservations working with people with bad credit. Nevertheless, the vast majority of respectable and legitimate moneylenders wouldn’t dare touch anybody with a bad credit score.

The main reasons for this include over-borrowing, indebtedness and an inability to pay things on time. These factors paint a picture of an individual who many moneylenders try to avoid. Applicants who find themselves in this situation should take the hard route of painstakingly restoring their credit status. This will involve striving to do the inverse of all the activities that got them the bad credit score in the first place.


Moneylenders, as a rule, don’t give payday loans to individuals who gamble. It doesn’t matter whether the individual in question only occasionally visits gambling sites, the lending institution doesn’t want to place itself in a situation where it is serving as a financier for gambling activities.

Therefore, it follows that all applicants will have their financial statements analyzed for such payments. The solution to this problem? Avoid online gambling sites altogether. If you absolutely have to gamble, then take the safe route and visit a bookmaker in your local area.

Welfare being your only source of income

There are a few lenders that don’t mind giving money to people whose only source of income is their welfare earnings, but the majority will only approve applicants who have a supplementary income. This additional income gives the moneylender the confidence that the applicant will have the means to pay back the money on time.

Getting cash payments

A common practice in many workplaces involves employees getting paid in cash rather than payments being made into their bank accounts. It’s also not uncommon to discover that such establishments usually lack any contracts for their staff. While the benefit of such a policy is that employees don’t have to pay any taxes, the downside is that they may have problems getting a payday loan.

All moneylenders will require evidence that such individuals have a regular income. If this evidence cannot be provided, the lender will have no option but to reject the application.

Bankruptcy in your financial records

If you have been bankrupt within the past year then there is a high chance that your application for a payday loan will be rejected. A moneylender will be of the opinion that your financial position is not strong enough to warrant giving you a loan at the moment. Nevertheless, there are moneylenders who have a separate loan policy for recently bankrupt individuals.

The upside of such conditions

The above-stated reasons might make it seem like moneylenders are too strict, but there is an upside to these conditions. This proves that the lender isn’t prepared to give their money to just about anybody who walks through their doors, so such a moneylender is most likely legitimate and worth engaging with.

Mark Jorel Snow

Mark Jorel Snow brings over 15 years of financial experience to help everyday people master their money. Mark is passionate about making complex financial topics simple. His down-to-earth explanations empower readers to take control of their finances with confidence. Mark specializes in creating tailored money strategies and providing unmatched personal support. When he's not coaching clients or penning his latest article, you can find Mark enjoying nature and time with family.

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