Payday loans can be a light at the end of a sudden financial crisis. These loans require lower credit scores for approval and can get customers money in their account in as little as one day. Though these loans are easy to apply for and fast to get, it is helpful to know the application requirements and lending standards to determine if you are eligible for a payday loan.
Take a look through this guide to understand payday loan eligibility to determine if this type of loan is good for you.
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Typical Payday Loan Application Requirements
Whether applying online or in person, you will need a few items and pieces of information for your application.
- Driver’s license or other government-issued ID
- Proof of employment or income
- Phone Number
- Email Address
- Bank Account Information
These pieces of information will help to prove that you meet the basic requirements to be eligible for a $500 payday loan. You must be over 18, a US citizen, a resident of a state where payday lending is legal, currently employed with a steady income, and reachable via phone and email.
If you apply online, you may need to have access to a scanner or fax machine to provide proof of documentation. Alternatively, some lenders will let you take a photo of documents on your mobile device.
Payday Lending Eligibility Variations by State
The requirements for eligibility and the regulation of the payday lender vary from state to state. Some states have strict guidelines regarding payday lending that might affect your eligibility. Here are three payday lending regulations that are state-dependent:
- States Where Payday Lending is Prohibited – Arizona, Arkansas, Connecticut, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and West Virginia.
- States With a Cap on The Number Of Payday Loans a Patron May Acquire – Washington, California, Nevada, Oklahoma, Kansas, Nebraska, Missouri, Iowa, Wisconsin, Illinois, Tennessee, Kentucky, Indiana, Michigan, Florida, South Carolina, Virginia, Delaware, Rhode Island, New Hampshire, and Hawaii
- States Where Loan Rollovers are Prohibited – California, Florida, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, Washington, and Wyoming
Credit Requirements for Payday Loans
There is no specific credit score requirement to be eligible for a $500 payday loan. Each lender will have a specific set of approval criteria, but there are a few credit issues that are likely to be problematic with all lenders:
- Outstanding loans
- Multiple delinquent payments
- Recent repossessions or foreclosures
- Recent Bankruptcy
Outside of major, current credit issues, your report is unlikely to be the reason you are denied a loan. Most lenders are more interested in your place of employment and income reliability. If you do not have a traditional job as a source of income, you may be required to show additional financial eligibility documentation.
This can include checking account history, pay stubs, or even a copy of your tax return.
Payday Loan Eligibility FAQ
If I am denied a payday loan, should I apply to a new lender?
Yes. Some lending companies will have looser requirements for credit and monthly income than others, so it is a good idea to try your application in a new place if you are denied. Alternatively, you can use a website like GreenStarCash.com that applies you to multiple lenders at once.
Is a bank account required for a payday loan?
Typically a bank account is required for a payday loan. Your repayment amount is often auto-deducted from this account on your scheduled repayment date.
Can I get a payday loan with bad credit?
Yes. Payday lenders have less strict credit requirements than other loan providers. Your employment stability and current income is a much bigger factor in the approval decision.
Can I use a cosigner on a payday loan?
No. Payday loans are unsecured loans, which means that the lendee does not provide a cosigner, collateral, or a down payment. Instead, the return of the funds is done through the direct linking of a bank account to ensure that the lender will receive their money.
Can I get a payday loan if I defaulted on a previous loan?
Possibly. If the defaulted loan has been paid off, it is less likely to affect your approval chances. If you have a loan that is currently outstanding, that is more likely to cause your application to be denied.
Why do payday lenders check my credit score?
Payday lending is a business, and lenders would lose money if they lent to everyone who applied. Your credit report can inform a lender of any major red flags on your repayment history. These red flags can help a lender manage the risk of lending by negating them away from applicants who are likely to default on the loan.
Will a payday lender call my boss?
Payday lenders will not call your job when you apply for your loan. However, if you are delinquent in repaying your loan, they may call your place of employment trying to find you.
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