Why Short-term Loan Application Can Be Rejected

Short-term loans are a very popular financial product. They are widely used in the US. Only US citizens can apply for a payday loan.

Americans gladly use payday loans received from financial companies. Many people think a loan application cannot be rejected. It is not the case. Payday lenders refuse loan applications very often.


Small loans are often issued by financial companies. They are private in the majority of cases. They need borrowers to return a loan. Here are the main reasons why a short-term loan application can be rejected:

  • A borrower does not provide an income statement. It is one of the basic documents to provide. An employer has to issue it. An income statement shows a gross salary of a borrower. If one takes a loan not bigger than his monthly salary a chance he will return money in time is big. Lending companies like such types of borrowers. If a person does not work he can present an income statement from one of the closest relatives. A third person has to write a guarantee he will pay the credit back if the main borrower will not do it.
  • Employment contract has to be presented. It is a key document to a lending company. A credit issuer wants to know for whom a person works for. If he works for a reliable company, a lender will assign a loan. If one’s employer suffers from financial troubles now, a financial company will hardly assign a credit. It is good to remember it.
  • Credit score. It is a very important parameter. This score is assigned by financial bureaus in the US. Those are governmental bodies. They develop a score based on credit history. If a borrower returns a loan in time, he will be assigned a high score. If not, there is no chance to cheat a system. Financial institutions rarely give credits to people with low credit score. They understand that a person does not feel responsibility when he takes credits.
  • No American citizenship. Short-term loans are issued to people who acquire American citizenship. If one has a working permit, it will not help. He will never get a loan.

These are the main reasons why a financial company will reject a loan application. Much depends on a financial firm. One has to choose the firms that accept negotiations.

Some firms are eager to negotiate terms of the loan issuance. They can accept substitutes of documents. A borrower has to talk to them.

Where to find lender

It is not a good idea to apply for a credit at a bank. In the majority of cases, they are not open for negotiations. It is better to contact virtual companies. There are many online. Such firms work as facilitators between a persona and a lender. Here is how the process goes:

  • A person fills in a form. He has to state his full name and a loan sum. It is more beneficial not to ask for large short-term loan crediting. The average sum can be 700 US dollars.
  • A company sends this request to several financial firms. They evaluate borrower’s profile. They prepare their loan offers. These offers are sent to a client.
  • Person chooses the most beneficial offer.

The process runs fast. A person can get a fine credit offer.

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