If you’ve been turned down by your bank or another financial institution, you may still be able to get a payday loan. A payday loan is a short-term, high-interest loan to help you when you find yourself urgently in need of cash. These loans can act as a lifeline to you during trying times. there are some things to think about before you apply for a payday loan. So are you asking My Loan was Declined Can I Get A Payday Loan? The answer is yes or maybe!
Key Points:
- Payday loans bear notoriously high-interest rates of around 400%. These can range up to 600%, so you should be certain that you will be able to afford repayments.
- The average loan in 2021 was $375 and was paid back in a short repayment window of two weeks.
- You should consider why you need the loan. Typical borrowers take loans out to cover unforeseen, emergency costs, such as medical bills or home repair bills.
- You should consider whether you can afford to risk damaging your credit score. Taking out loans and failing to meet repayments can scar your financial record, making borrowing more challenging in the future.
- You should check your eligibility, such as ensuring you have an active checking account, American citizenship, and are over the age of 18.
My Loan Was Declined Can I Get a Payday Loan?
Even if you’ve been turned by your bank a payday loan could solve your financial problems.
If your circumstances are urgent, then payday loans are a quick and simple means of cash. Maybe you’ve been hit with a medical or dental bill, or your home or pet needs urgent care. When times like these arise, it is difficult to predict them and can leave you unsure how to meet your costs. With payday loans, you can receive your cash within one day of applying, alleviating your worries – for now!
You should be aware of how your credit record is looking, too. 75% of borrowers have taken out loans before, and given that only 14% of borrowers can afford repayments, many of these borrowers have damaged their credit records by failing to meet repayments. If this is you, and your credit score has suffered from payday loans already, then you should avoid taking another one out if you can. Failing to meet repayments lowers your credit score, while deters lenders from lending to you, as you appear unreliable.
If you do have bad credit but have no other means of finance, there are many lenders who lend to those with rocky credit histories, so don’t panic! Instead, look into no credit check loans.
What Would I Need A Payday Loan For?
Payday loans are designed to help you in urgent situations that you don’t have the funds to overcome on your own.
Typical reasons that borrowers seek funds are to cover hospital or veterinary bills, repair a car or home issue, or buy a new boiler if the heating breaks.
Whatever your reasons for taking out the loan, they should be credible and serious. You should never take out a loan to cover impulse or frivolous purchases, like buying a new watch or expensive car.
Can I Get A Payday Loan If My Lender Thought I Couldn’t Pay My Loan Back?
Before entering a contract for a loan, you should have a plan of how you will pay it back. Not only will you owe what you borrow, but you will owe high interest on your loan, too. With payday loans, this will likely be around 400%, dependent on your state. 18 states have limited interest that can be applied to loans, such as Montana, whose loans bear a maximum of 36% APR.
Repayments can become a problem if you haven’t planned ahead. Failing to make your monthly payments, can result in late fees, threatened legal action, and your credit record being hit. A weak credit record implies that you aren’t a reliable borrower, which could result in future difficulty in getting a loan, mortgage, or even something as simple as a phone contract.
If you think you may have, or find you are having, trouble paying back a loan, reach out to your lender about an alternative repayment scheme. Perhaps they will offer you an Arrangement To Pay like longer term loan, with smaller but more frequent repayments. In some cases, they may be willing to lower interest, to make a loan more affordable to you. There is only one way to find this out, and that is to talk to them. Ensure any agreements are put in writing.
Are Payday Loans An Expensive Means Of Borrowing?
Yes, payday loans are notoriously expensive, with high-interest rates that will range from 30-500%. APR will depend on a lot of things, such as your financial history, where you live, and how much you apply to borrow.
It may be preferable to use a loan broker, like Funding Zest. As a broker, we work with panels of lenders and will be able to file through them and find the best provider with the best rates for you. Funding Zest can definitely help you with the question My Loan was Declined Can I Get A Payday Loan?
However, this is still likely to be expensive. It may be worth looking into cheaper options, such as becoming a member of a credit union and borrowing from them. They offer lower rates, but can often only provide small loans. You could also consider asking a loved one for support, seeking a guarantor loan, or asking your employer for an advance on your paycheck.
Of course, rates will differ according to where you live. Many states, such as Montana and New Hampshire, have limits on how much lenders can charge on interest. Therefore, it is worth being familiar with state regulations before jumping to conclusions on how much your loan will cost you.
If My Loan was Declined Before How Much Should I Try to Borrow This Time?
It’s possible that you asked for too large a loan last time. It’s why you could have been turned down. Lenders check your credit history and if it looks like you can’t repay a loan they will turn you down. With many providers, you can borrow up to $35,000 through a payday loan. Many lenders will not be able to provide you with such a huge sum of money, and many borrowers don’t seek such a large loan.
In 2021, the average loan was only $375. This is also because individual states have been setting regulations limiting how much citizens can borrow. For instance, in California, which is the state housing the most number of lenders in the US, borrowers can only take out a maximum of $300, for a maximum of 31 days. As such, it is unsurprising that the average is low.
Your Loan May Have Been Turned Down Because of the Terms You Chose
You can, in theory, borrow for up to 60 months in the states that allow it. Having said that, when you applied fo your loan, you may have gone for a repayment schedule that the lender did not think was appropriate and turned you down.
Many states have also set limits on how long you can have loans for, in addition to how much funding you can secure. Tennessee only allows you to borrow for up to 31 days, just like California. Some states set minimum loan terms, such as Colorado, where you can borrow a maximum of $500 for a minimum of 6 months. Ensure that you are aware of your state regulations and that your lender’s offer complies with these. If you’re concerned about a lender, check with the Consumer Finance Bureau.
My Loan was Declined Can I Get A Payday Loan If I’m Eligible?
To be eligible for a loan with most lenders, there are a few simple requirements. If you don’t fit these criteria that could be the biggest reason your loan was declined. Look at this list. How do you stack up?
- You must be a US resident
- You must be over the age of 18
- You must have a regular income of at least $800 (sometimes $500) a month
- You must have a bank account for the lender to deposit your funds
