The Reasons The Lender Can Deny Your Payday Loans
Sometimes the lender can deny your application. The reasons for refusing may be different. Here is a list of the most common reasons, so carefully study them in order to successfully get your application approved.
- Credit issues. Although the lending companies claim they provide payday loans no credit check, they always check your credit history in the database. A bounced check can spoil your financial history and that is the main reason the lender can deny your application. However, there are some lenders that offer payday loans for bad credit
- Lack of income details. If you don't have a stable income or the amount of money you borrow exceeds 60 percent of your total income, you are likely to get rejected.
- Errors and inaccuracies when filling out the application. The lender will carefully check everything that you specified in the application form. Any mistake or inaccuracy may result in denying payday loans. For example, if you make a mistake with one digit in your home telephone number, you can inadvertently indicate the number that appears in the lender’s database as an office one. Scoring may regard this as an attempt to provide obviously false data.
- You have already had unrecovered borrowing. Nobody wants to risk their money, nor do the lending services. The lender must be sure you can make payments. But if you have multiple debts, the lender may recognize you as an irresponsible recipient and reject your application.
About Payday Loans Costs
According to the CFPB study, the average payday loans cost given by an in-store lender is $15 for every $100. So, if you borrow $500, it is necessary to repay $475. The cash advance taken for two weeks will cost you a 391% APR.
If you decided to address online services, you are going to pay more. Online payday loans typically cost more. The average cost for online payday loans is almost $24 per $100. So, if you borrow $500, it is necessary to pay off $620. In this case, the APR reaches impressive 613%.
In case you fail to make a payment on the first payday, the financial company will add a new charge, but the cycle will repeat. In a few months, you will have to pay more in the rate of interest than the initial amount. This can make your financial hardship even worse. That is why the borrower should understand all the risks while working with lending services. Knowing what makes payday loans dangerous can keep borrowers from falling into a debt trap.
How To Effectively Clear Your Payday Loans
After making the payment on the cash advance, you need to make sure that the loan is closed. To do this, you can choose one of two options:
- Check the necessary information in your account on the lending company website.
- Contact the customer service, and after confirming your identity, make sure that the loan is fully repaid.
If the debt is not paid in full, do not panic or hide from the lender. In such a situation, you need to get in touch with the financial institution to solve the issue.
Also, you need to understand that although the process of getting payday loans is simple, it is always necessary to fulfill your obligations.
Payday Loans Alternatives You Should Know About
Apart from payday loans, there are other options to get urgent money. Some of the, are more expensive while others are rather affordable. These alternatives include:
A long-term payday installment loan is a type of payday loans which have a longer repayment period. It is possible to extend the repayment period for years. Such offers are available either online or in-store. Long-term payday loans typically have 400% APR. To have a deeper insight into the matter, let’s imagine you have borrowed $2.000 for three years. In total, the sum of your repayment will be $16.000.
An auto title loan is a type of short-term loan where the borrower pledges his/her vehicle as collateral. This option is not cheaper than payday loans, so be ready to pay a monthly fee is about 25%. Usually, it is possible to borrow from $100 to $6.500 and make a repayment within a month.
Credit union loan is a good option for those who want to borrow money with a lower rate of interest. A credit union is available up to three times in a rolling six-month period. The APR is almost 28%.
The Final Word
Payday loans can be very helpful in terms of dealing with urgent financial help. However, this type of financial help can’t cope with serious financial issues. So, it is better to think about your financial responsibility before approaching a lending service and avoid borrowing money from multiple companies.