Payday loans should definitely be used as a last resort,
and they are suited for people who need a reasonably small
amount of money in a short period of time. Many of those
who apply for a payday loan also have bad credit. Fees
associated with these fast cash loans are exorbitant,
translating into annual interest rates of 200 percent or
higher - usually much higher! They are also rather easy
to get for most people who are employed full time or near
full time. Not all people, however, who apply for a payday
loan are approved. The following are some of the more
common reasons that people are denied payday loans:
Some people who apply for a payday loan are disapproved
because they don't meet the minimum income requirements.
Even the most flexible payday lenders cannot loan money to
someone who grosses less than about $800 per month. Anyone
working at the federal minimum wage full time would easily
meet this requirement.
Someone who is self employed will find it more difficult to
get a payday loan. Many lenders will not accept self
employed income as security for a payday loan. Those
lenders who do will require you to provide a certain number
of bank statements to verify your income.
An almost universal requirement to get a payday loan is
that the applicant have a bank account. A typical payday
loan is due to be repaid on either your next payday or the
following payday. The money is deducted from your bank
account on the agreed upon date. If you have no bank
account, the lender will not have a way to accept your
payment.
As the term "payday loan" suggests, you must have some kind
of income to qualify. Even if you have a healthy savings
account, you must have income or you will not be approved.
Then again, if you had substantial amount of readily
accessible savings, why would you want to get a loan with a
600% interest rate?
A red flag for most payday lenders is an outstanding loan
with another lender. A person with multiple payday loans
outstanding is viewed as a serious risk of default and
returned checks. Most lenders use a data verification
service to identify applicants with multiple outstanding
cash advances, and to confirm that the banking information
provided by the applicant. If you have had returned checks
in the recent past, especially to a payday lender, this
information will come to light and will prevent you from
getting a payday loan.
Bankruptcy, especially in the last year or two, will make
it more difficult to get a payday loan. While the
information provided to the lender is not a credit report,
it will reveal a recent bankruptcy. Until you have put
some time between you and the bankruptcy, you will be
considered financially unstable and will not be eligible to
get a payday loan from many lenders.
To qualify for a payday loan, you must have been employed
with your current employer for a certain period of time,
usually at least three months. This requirement is not
universal, but many lenders will not approve payday loans
for new employees. You must demonstrate that your
employment situation is somewhat stable, and new employees
are often subject to a probationary period where they may
be more easily terminated.
If you fall into one or more of the above categories that
alarm payday lenders, don't dismay. Not all lenders
consider every one of these factors in their approval
process. Most full time employees would qualify for a
payday loan; however, if you find yourself using payday
loans frequently, take an honest look at your situation.
If your debt is growing out of control already, too many of
these expensive loans can push you to the brink of a
financial disaster, and consequently, you should use them
rarely and cautiously.
----------------------------------------------------
Gregg Pennington writes articles on a variety of topics
including payday loans, bad credit loans, and other sources
of money available online. For more information about
payday loans and cash advance loans visit
http://www.onlinemoneysources.net/payday-loans.html
No comments:
Post a Comment