All payday lender has an obligation to make sure their customers borrow money responsibly. As such, it is not uncommon for the payday or personal loan lender to decline many customers in a day if they see red flags. So, before you go applying for another payday loan, take note of these 6 reasons to why most payday lender may decline you.
1. You have too many existing payday loans
What many customers don’t know is that when a payday loan company view your application, they are able to look at your financial history. As such, they would know how many times you have applied for a loan in the past. If they notice that you’ve applied for multiple payday loans from various lenders, then this can be big a huge red flag for them.
2. Centrelink is your only source of income
Even though you may think Centrelink income is regular and safe, but in a payday lender point of view, having “only” Centrelink income might not be enough to meet their requirement. As there are specific guidelines given by ASIC (Australian Securities and Investments Commission) for lenders for approving borrowers with Centrelink income. They may see this as too high of a risk to lend and hence decline. If 50% or more of a person’s income comes from Centrelink, their loan repayments cannot exceed 20% of that person’s income.
3. You had made payments to gambling sites
This is one of the main reason which many people don’t realise when they apply for a loan. Payday lenders are able to see your statements to check your financial situation. As such, they will be able to see if you had made any payments to gambling sites. From a lenders perspective, they normally would see people who spend money on gambling regularly as irresponsible with their money and would decline these applicants.
4. There are too many dishonoured payments on your bank account
Dishonour occurs when one doesn’t have sufficient fund in their bank account when a payment is being processed. As a result, if your bank account shows too many dishonoured, the lender will view this as a risky applicant and would reject it.
5. You didn’t meet the minimum requirement
This one may be the most obvious, but many people still apply for a loan without knowing the minimum requirement. Before any lender does their assessment, they would look at the applicant to see if they meet their requirements. If they can see that he/she doesn’t meet, then they would not go further and reject the loan immediately. So, before you apply for any payday loan, please ensure that you will meet the minimum criteria. These criteria include age, employment, income and residency requirements.
6. You don’t have evidence of regular income
Not having regular income is considered risky for a payday lender and is very highly likely that they will reject the loan. Another risky candidate in a lender point of views are clients who are being paid in cash. By lending responsibly, lenders need to be able to verify a person’s income, which is usually done using an applicant’s bank statement. If you deposit cash into your bank account in cycles at a similar amount, then the lender can verify this as your income. However, if these deposits are irregular with fluctuation in the amount, then the lender cannot verify these amounts as your income and find you risky as a candidate.