If you're considering taking out a payday loan, there are a few things that could prevent you from getting one. The most common reasons for being denied a payday loan (or any loan) are your credit score, income, and past loan history. Payday lenders usually don't require a credit check or proof of the borrower's ability to repay the loan. However, if they know you don't have the means to pay it back, they may not lend you money.
If this is the case, there are other alternatives to payday loans that you can consider. You may need to close your current bank account and move your money to another one if the payday lender has access to your funds. Some banks won't open a new account for you if you owe money to another bank. Defaulting on a payday loan can result in bank overdraft fees, collection calls, damage to your credit score, a day in court, and wage garnishment.
Even if your application has been denied, you may still be able to qualify for a payday loan with another provider. If you're denied due to the lack of a Veritec check, it usually means you don't meet the state's minimum requirements. Borrowers seeking payday loans may come from communities that don't have sufficient banking services or have limited access to other financial tools that offer better financial options. If you know you won't be able to repay the loan and interest before the due date, then a payday loan could create more problems than it solves.
Paying the payday lender should not be prioritized over putting food on the table or paying rent. Business models and regulations limit the size and duration of payday loans, but they are still an expensive alternative and should be taken with caution. If you think a payday lender harassed you while trying to collect your loan, contact DFI to file a complaint. You could end up taking out several loans in a year if you take one each payday to pay off the last one or other bills.
Eligible loan amounts vary depending on the income of the borrower and payday lender, although most states have laws that set maximum payday loan amounts. Some states also have cooling-off periods between payday loans, which can last from 24 hours to more than a month. If you continue to be denied payday loans online, evaluate why your loan application is declined.