Whether you have a good or a low credit score, a loan rejection can be equally unfortunate. It is indeed disappointing if you need cash immediately with payday loans. It is the best way to counter emergency needs without worrying about bad credit issues. Though these loans are easy to qualify for, lenders reject some applications.
When you suffer a payday loan rejection, you might be worried and scrolling for the reasons for the same. However, different lenders share different criteria to calculate the borrower’s affordability. Thus, knowing the reason and working according to it would help you qualify for the loan.
If you really need financial help quickly and do not know what to do next, then the blog will help you.
Possible Reasons for Payday loan Rejection
Does the lender turn down your payday loan application recently? It must be shocking to you.
But, not knowing the reasons leads to further delay. Below are some common reasons lenders may reject a payday loan application.
- Credit Agencies holds negative review about your finances
- A lender believes that you cannot afford the loan given the present circumstances
- Wrong information on the application form
- You lack sufficient or comprehensive credit history
- Your credit profile reveals too many payday loans (over 5)
- You have applied multiple loan applications within 30 minutes
These are some common reasons a lender may reject a payday loan application. You can still do something to get an instant salary-day loan.
Actions to take to get a payday loan after a rejection
Do not apply with some other lender immediately after the rejection. It may not turn the best way out. The other lender may witness the rejection of the loan and hence may reject it too. So, stop and consider other options to bridge the cash need.
Here is what to do next:
- Contact the credit agencies or your lender
If you have suffered a payday loan rejection just an hour before, it is better to confront the reason for the loan rejection. The agency may disclose it to you. If you do not get clarity from them, contact credit reference agencies.
The agency will help you with the exact reason for the rejection of the loan but will also help you qualify for the next one.
It will help you point out the potential on your credit report. Meanwhile, you can also cross-check the delinquencies in your credit report with the credit agency. If you report any duplicate entry, seek removal.
2) Identify the best lender as per your chances
The credit agency would help you know the root cause of the loan rejection.
For example, the reason for the loan rejection is many payday loans or short-term loans. Instead, seek a bad credit loan lender. He will not only help qualify but also get a flexible amount.
Or, if you only need a small amount, check lenders that provide a payday loan as per your personal circumstances. Identify whether borrowing a lower amount may help qualify for the loan. It may not only help qualify but reduce interest rates as well.
- Go for pre-qualification
Checking your eligibility for the loan before applying will help you avoid any credit remarks. Many lenders provide free eligibility checks.
Fill in the details and know whether you share any chances to qualify for the loan.
If yes, you can apply and get the loan.
However, there are other things that a lender may ask for beyond the initial soft credit check- id PROOF, income proof, etc.
Identify the requirements and whether you have it all or not. It would help you avoid the delay in getting the loan.
A soft credit check helps determine affordability and does not impact your credit score.
4) Work on your credit report
It is one of the most critical tasks in a payday loan application rejection. Identify the best possible ways to improve your credit score. You can follow these steps:
- Get your name on the electoral roll
- Remove delinquencies from credit report
- Pay off some loan
- Consolidate high-interest loan
- Removal of invalid CCJs
These aspects help improve your credit report and qualify for a payday loan. It may take some days to get the results.
Meanwhile, if you need cash urgently, you can ask your neighbours, friends, family or roommate for help. You may even tap your savings if you have some to meet the requirement.
- Check the payday loan alternatives
If you cannot qualify for payday loans, there are other things you can do to get minimal cash:
a) CCJ loans
Yes, you have got it right. You may leverage the loans if you have too many CCJs in your credit profile. You can get the loan on a stable income but bad credit history. If you need a higher amount, you can get one by calling in a guarantor.
b) Unemployed loans
Qualifying for payday loans as an unemployed could be a little challenging due to competitive APRs. If you are unemployed and share limited needs, unemployed loans can help. You may secure limited cash if you receive government benefits. You can also reveal part-time income proof to get a flexible amount in the loan.
c) Bad credit loans
These loans are ideal for individuals with low credit scores and income. Bad credit loans help individuals with high debt-to-income ratio qualify. You can get the money in a day or two in your bank account.
These are some ways to get payday loans or tap alternatives. However, many individuals ask:
Can I Get Guaranteed Approval on Payday Loans?
Payday loans are the most convenient loan type. It is the reason individuals prefer it the most in emergencies. If you have faced payday loan rejection, do not worry. The above aspects may help.
However, there are some conditions where you may get no refusal payday loans in the UK marketplace:
- You have stable employment and long employment history
- You have a manageable credit profile
- You provide authentic identity and income proof
- Do not make multiple payday loan application
- The recent credit and outgoings are satisfactory
To get a payday loan again after a refusal, you must first know the reasons behind the loan refusal. Once you know, you can work on your credit report. Avoid applying multiple times. Meanwhile, you can tap other short-term loans available for bad credit to meet your requirements.
Lisa Ann has developed a well-experienced professional career. From managing the staff of more than 50+ loan experts at Fastmoneyfinance to boosting the delivery of various loan offers, she has acquired many challenging roles to come out with the best results for the company. Lisa Ann is a Senior Content Author and the Chief Financial Advisor at Fastmoneyfinance. To back her massive experience in the UK’s financial industry, she has the postgraduate degree and diploma in Business and Finance.