9 Reasons You Were Denied a Payday Loan

9 Reasons You Were Denied a Payday Loan

Updated: January 30, 2023

7 Min Read

Table of Contents

Why Do So Many People Rely On Payday Loans?
What Can Be The Reason for the Denied for Payday Loan?
How to Get Your Payday Loan Approved?

Usually, by the time you apply for a payday loan, you already understand that your options are limited. A big part of Americans has a credit history that is not good enough to apply for a personal installment loan from traditional lenders.

Should it happen that you will be tonight’s payday loan it’s important to know the reason so you would understand what to work on. And there’s always a chance it was a mere mistake in the application form.

Why Do So Many People Rely On Payday Loans?

denied for payday loan

At least 12 million Americans use payday loans every year. That adds up to roughly 6% of us adults. And there’s a high chance that the statistics are not full. So why payday loans are so popular? There are several reasons for that.

First of all, traditional financing institutions such as Banks and Credit Unions have extremely high standards for applicants for a personal loan. In order to be approved for a loan from those institutions, one has to fit many criteria, and one of those criteria will be a good credit score.

Unfortunately almost half of the American population does not have a good credit score either due to lack of credit history or to problems with paying loans that were previously taken out.

The second reason might be that payday loans are extremely convenient to take. Today it’s very easy to apply for a payday loan online from the comfort of your home or even on the go from the screen of your smartphone. The application process is extremely easy and fast. In case of an emergency payday loan is basically the only available option for the general public. The payday loan amount is usually in the applicant’s bank accounts by the next business day. After that the borrower can cancel the money the way they see fit, no questions asked.

And then there is this problem with the credit history. There are plenty of people who have a poor credit rating. It doesn’t mean that they did anything wrong but merely that they did not take out enough loans in my life so for the traditional lender to be able to make up their mind whether they are good for their word. A bad credit score means that there were some red flags that just came out at the last credit check by a traditional lender. Those red flags can be anything from having too big of a loan amount on outstanding loans to being late on the loan payment.

What Can Be The Reason for the Denied for Payday Loan?

what can be the reason for the denied for payday loan

Being denied for a payday loan might sound like a hard blow. But before caving into panic it’s important to analyze what went wrong. Perhaps, that was just so mistaken the application that is easy to fix. Or the information in the documents did not get reflected in the application form as it was supposed to. Good news, a poor credit score is rarely a reason to be denied a payday loan. Let’s look at the reasons that might actually be serious enough for someone to be denied a payday loan.

  1. You Don’t Meet Criteria Established By A Payday Lender

    Before you try applying for a payday loan, it’s very important that you’ve read all the necessary information provided by the lenders. Although some lenders have a condition that an applicant must be at least 18 years old, there are also some who have a higher age minimum.

    In case that’s the reason why you got denied a payday loan, you can easily apply with the payday loan lenders who are ready to consider applicants of 18 and older.

  2. You Don’t Have a Steady Income

    Lenders might have additional questions if your bank statement doesn’t show regular income. Since payday lenders do not usually do a hard credit check, the only way they can be sure that you have the means to return a loan is by making sure you have a monthly income. Doesn’t have to be a big one: some lenders accept child support and even unemployment benefits as a steady income. In case you are a gig worker just search for the lender who is providing loans for freelancers.

  3. You Don’t Have An Active Checking Account

    Usually, in a payday loan agreement there will be a closure stating the following. In case you don’t pay your payday loan in the discussed time, the lender has a right to extract the sum of the loan plus the fees from your checking bank account. This rule allows payday lenders to be more secure they will get the amount they are lending you back. In case you don’t have an active checking account it will be impossible for them to secure the repayments of the loan. Also, the account is necessary to get a direct deposit of the loan by the lender.

  4. The Loan You Have Requested Is Too Big

    In case the loan amount you have requested is too big you might have financial difficulty repaying a loan. If you are not making enough money on monthly basis to be able to repay the loan from your next paycheck, the lender might deny you not the loan is such, but the amount you are requesting.

  5. You Have Requested a Loan With Many Lenders

    When you apply for a payday loan, direct lenders might not run hard credit check on you, but still, they do have their own system where there might be checking information on you. In case you have requested a loan with more than one lender at a time, most probably you will be denied the loan from all the lenders.

    So, in case you want to have a higher chance of being approved for a payday loan, it is important for you to make sure that you fill in the paperwork correctly and don’t hide any important details on your application. Requesting a loan from multiple lenders will not make your chances of being approved higher.

  6. You Have An Unpaid Payday Loan

    Your past borrowing history might be the reason why your loan application has been denied. If you already have existing loan agreements with another lender your application for a payday loan with the new lender might be as well denied.

  7. You Have Filed For Bankruptcy In Past

    In case you have filed for bankruptcy in the past 7 years, it might be difficult for you to get approved for a payday loan. Usually, filing for bankruptcy day doesn’t come out of the blue and they are serious reasons influencing your ability to pay your debts. And the situation might just be too risky for a payday lender to approve you for a loan soon after bankruptcy.

  8. You Have a Gambling Habit

    Too many interactions with gambling sites may alarm your potential direct lenders. If your bank statements have too much money exchanging with the gambling sites, there might be a chance you won’t get approved for a payday loan. Despite the controversy around the industry, the ethical part is important to payday lenders, and it’s not in their interest to support a gambling habit.

  9. You Have a Joint Account With Somebody With Bad Credit

    Another reason you might not fit the eligibility criteria for a loan is that you have a joint account with someone with bad credit. Maybe your credit score is fair but you have joint finances with someone with too much debt. So, when applying for short-term loans you have to assess not only your financial situation, but also the other party’s borrowing history.

How to Get Your Payday Loan Approved?

why do i keep getting denied for loans

In order for your loan application to be approved by the lenders is this important you follow some very basic rules.

  • Know your credit report. In order for you to feel secure when applying for an online payday loan, you should know what your credit file is stating. In case you have a low credit score you might consider improving it. That can even give you more options for loans with traditional financial institutions and other payday loan alternatives. If you can’t make any credit repair, at least make sure that the file is up to date.
  • Double-check the information you provide. When filling in the loan applications, keep in mind the lump sum of loans placed into your bank account as direct deposits. For this reason, it’s important to check the accuracy of the information you provide in your credit applications.
  • Make sure you’re good with existing loans. When you have outstanding installment loans it is crucial for you to make timely payments on them. Do not forget that most lenders will deny you a payday loan if they find out that you already have an outstanding payday loan.


  1. I Keep Getting Denied for Loans, Why Can’t I Get a Payday Loan?

    There is a possibility there’s a mistake in your paperwork. Check if everything is in order before filing your payday loan application.

  2. What Do You Need to Get a Payday Loan?

    Payday loan requirements may differ from lender to lender. If you’re less than 21, make sure that you will apply with the lender with a bar of 18 years old. Some lenders do not approve payday loans for those who are less than 21.

  3. How Important Is It to Have a Good Credit Score?

    It is not essential for some lenders to see your good credit score, but a high credit rating allows you to have more options on your loans.

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