Many people need cash, but they’re often too intimidated to ask because they’re afraid of rejection or may have been rejected in the past. Although they should only be used as an absolute last resort — primarily because they have extremely high interest rates — if you have no other options, you should know that there are ways to qualify for a payday loan, even if you have bad credit.
First, Understand the Rules
Payday lenders aren’t allowed to loan money to minors. If you’re under 18 or accidentally select today’s date as your birth date, you’ll automatically be rejected. Payday lenders are not allowed to loan you more than you can afford to repay. This is why in some countries they’re not allowed to loan more than $2000 to anyone, and the loan amount is often lower based on your salary. For example, a payday loan website in Australia may tell you that their maximum loan amount is below the government’s threshold; they’ll often do this to limit their risk by choosing not to loan more than $1000 to anyone or more than 20% of your stated income.
And if you only work part time or work irregularly, they may not let you borrow any money. Don’t make the mistake of inflating your income in order to qualify. If caught, they’ll reject the loan or could even prosecute you for fraud.
Provide the Necessary Information
Lenders need to know about potential customers. There is key information you must provide so that they can pursue an unpaid balance, prevent fraud, and gauge their risk. This is why lenders require copies of your driver’s license and other identity documents. They may require a liveness check that has you stare into a camera for several seconds or make funny faces. Liveness checks let the lender verify that they’re working with the person whose face is on the ID.
You should expect to provide certain other information too, including your full legal name, your address, and a phone number. A surprising number of online loans are rejected because someone makes a typographical error entering an address or ID number. If the lender sends a code to your cell phone to verify that you’re using a working phone number, using a fake phone number or accidentally transposing digits will cause you to fail that verification process.
Of course, the payday loan is secured by your income, so you will need to provide proof of employment which will include a photo or scanned copy of your pay stub.
A common mistake is not filling out every required field on the application. Failing to fill out mandatory fields may result in the loan application being rejected, if it doesn’t warn you about the empty fields.
Have the Necessary Linked Accounts
Payday lenders won’t send you a check; they typically wire the money to your savings account instead. The downside to this is that it means you won’t get the money if you don’t have an active checking account. Relatively few lenders will consider putting the money on a cash card.
Know that the lender will almost certainly take payment out of this account when your pay check is supposed to be deposited. It is your responsibility to make certain that there are adequate funds in the account to cover the amount due. You don’t want to be on the hook for late fees and bounced check fees on top of the interest and principal.
Photo Credit: stock photo