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Yes, your loan application could be denied. The most frequent causes of application rejection is a low credit score, high debt-to-income ratio, and lack of income. 

In most cases, you will be able to find a lender – especially if you use a broker – that will happily become your lending partner. Even so, it is useful to understand why a loan application may not be approved to help you strengthen your chances in the future. 


Key Points:

  • 12 million Americans use payday loans each year, and many will be rejected upon first application.
  • Rejections are usually due to a poor credit score, high debt-to-income ratio, lack of income, or applicants providing false details.
  • There are over 23,000 payday loans providers in the US. There is one for you out there!
  • Using a loans broker can streamline the process of finding a lending partner if you have had a rocky financial past.


Why Could My Payday Loan Application Be Denied? 


There are a few possible causes: 

  • Your credit score is too low. A credit score is a  number between 300 and 850, and higher scores represent better financial habits. The average score in the US is around 675. Those with credit scores below around 580 may struggle to secure a loan. If this applies to you, you should seek out a no-credit-check loan or improve your credit score
  • Your income is too low. Some, but not all, lenders require their borrowers to earn a minimum of $500 to $800 per month. 
  • You have requested too big a loan. This could be a legal issue. If your state limits how much you can  borrow, like California does at $300, and your request exceeds the legal cap, then your application will be denied. 
  • Your details are inaccurate. If you have provided a false name, email, address, or have provided someone else’s details, then don’t be surprised when your loan application is rejected. It is important to be truthful when applying; you are entering a contract.
  • You have too many active loans. Some states, such as California, Florida, and Hawaii, only allow borrowers to take out one loan at once. If you apply for a second, you will be rejected. Similarly, some lenders have self-imposed limits on how many debts borrowers can have at once. 
  • You fail to meet the lender’s requirements, such as being over 18, have an active checking account, and a permanent address. 


Applications could be denied due to low credit score

Lenders may be reluctant to lend to you if you have been an unreliable borrower in the past.


How To Improve My Chances Of Getting Approved For a Payday Loan


Bad Credit History


When you submit a loan application, lenders usually assess your borrowing history when deciding whether to be your borrowing partner. This decision is usually based on your past financial action, which is reflected in your credit score.

Lenders hope to see a strong history of fully and promptly repaying loans. Such a borrower will typically have a higher credit score, in the 600-800 range.

Applicants should try and nurture a high credit score, avoid borrowing money unless necessary, and always make repayments on time. 

If you have a weaker credit score than you would like, don’t panic! Many lenders and brokers work everyday to provide loans to those with imperfect credit histories. By using a broker, it is usually quicker to find a lender willing to provide you with funds. 

To familiarize yourself with your credit score, check the FICO or Credit Karma website.



High Debt-To-Income Ratio


A debt-to-income ratio shows how much you owe in debt repayments VS how much you earn per month. 

If the lender does not believe that the applicant is capable of repaying the loan due to this ratio being high, the loan application will usually be rejected.

The best way to prevent this being grounds for your loan being denied, aim to pay back debt where you can. This improves your ratio. 


If you choose to find another means of funding, a credit card could be the way to go.

If you choose to find another means of funding, a credit card could be the way to go.


My Application Was Rejected! Now What?


First and foremost – stay calm! 12 million Americans take out payday loans each year, and plenty of them would have been rejected upon first try. So, there is still plenty of hope!

The quickest way of location a loan is to consult a broker, as they work with panels of lenders and will know which lenders are suited to you. 

If you have decided you would rather borrow funds not through a payday loan, there are plenty of ways to do that. 

Cash Advance – Your first option is to ask your employer for a cash advance. This, in a nutshell, is when they give you an early paycheck. If you are receiving benefits, it is also possible to ask for an advance on your benefits.

Credit Cards – Alternatively, you could use a credit card. This means you charge transactions to a creditor and then pay them off at the end of the month. It is vital that you stay up-to-date with credit card payments. Like any debt, failing to pay them off will land you with charges and damage your credit score. 

Credit Unions or Borrowing From Family – You could also approach a credit union for a loan, or ask a loved one for support. You should, in any of these situations, be sure that you can pay off your debts.