Most people opt for payday loans only during emergencies. However, there may be a few of them who will need the loans even to run their monthly expenses due to various other reasons.
While they are fairly easy to apply and get, due to the simple eligibility criteria, there are some rare cases when you may not be able to get a payday loan.
To start with the eligibility criteria for payday loans do not require you to produce collateral or pledge your property to get the loan. In fact, it is an unsecured loan which does not require any security in exchange of the loan money. So there are no legal hassles, no running around to arrange for documents and paperwork etc.
Banks usually give payday loans without any credit checks on the borrowers too. All one needs to apply for this loan is to be above 18 years of age and a permanent resident of the country.
The applicant needs to have a full time permanent job that will pay him a regular fixed amount as salary into his active bank account.
This bank account will help the lenders with vital information on the kind of income that an individual draws and the type and amount of each transaction carried out.
But, when the bank for some reason refuses you the loan that will put you into a completely tight spot to handle! The reasons could be your credit rating, your income figures, the nature of your job, some previous history with the bank or any other reason which the bank may or may not explain to you.
Either ways, it is a good idea to pursue with the bank or the officials there to find out as to what is the real reason for your application to get rejected. This way, you need not grope in the dark and can start working on what to fix or set right so that the bank trusts you and willingly accepts your loan application the next time you apply for a payday loan.
In the meanwhile, you cannot put aside your need for money which will need to be met somehow. Do not worry even if the banks for reasons known or unknown have rejected your application.
The loan market is full of plenty of lenders who are willing to service customers of various types with amounts of varying degrees. You can easily find the money lenders who will give you loans even when the banks refuse! However, there will be certain conditions and terms attached which you will need to be careful and agreeable too in order to get the loan.
The interest rates could go up higher than the normal rates offered by other lenders and so will the fees and charges attached to the loan. These types of lenders will be very rigid with the terms of repayment of the loan as the risk taken by them in your case is higher than that of the bank.
Be sure to understand each and every term and conditions put forward by these lenders and do analyse the total cost of the loan for the amount that you avail. Always work with such lenders only as a last resort as most of these lenders will be from the unorganised sector and can also mean harm in case of any delay in repayment of the loan.
You will need to carefully study the reason you want the loan, the exact amount required, what are the costs involved and finally, is the loan worth the cost that you will have to pay.
Another important thing with the lenders is to find out if they accept a security against the loan in which case you may have a chance to negotiate the rates and terms of the loan.
A security against the loan will take care of a certain amount of risk from the lender and therefore you can also enjoy the benefit of the collateral against the loan.
Being a payday loan, the amount of money sanctioned by these lenders will also be in the same range as that of the bank. Therefore, do not expect them to loan you big amounts.