Reasons Why Lending Companies Refuse to Give Online Loans

There are often some occasions in everyday life when we need extra money. For example, the birthday of a loved one, the New Year, the necessary purchase of household equipment and so on. Then most of us decide to apply for a loan.

Some of us prefer to use the services of a bank, others trust credit agencies. Also, online lending is very convenient in our time and because of it, e-transfer payday loans Canada have grown in popularity. But sometimes it is rather difficult to apply for a loan quickly. Before you want to apply for a loan, you need to read the terms of your lending company.

Naturally, there are some reasons when your lender cannot give you an online loan. Why does it happen? There is a list of the most popular 7 reasons for online loan rejection.

Reason 1: You Have Existing Loans

For some lenders it is rather important if you meet these conditions:

1. You do not have any other online loans that you are currently repaying
2. You have not taken out more than one loan in the past 90 days
   Unfortunately, If you can’t match these conditions, that’s enough to reject you for a loan.

Reason 2: You’re Unemployed

The logic works here. If you do not have any employees, then you have no income. Therefore, the lender has a good reason to doubt that you can repay this online loan that you want to take. So, some lenders refuse your request straightway.

Reason 3: You’re Paid in Cash

Some employers pay the salary in cash. It can also make it difficult for you to be approved. When you want to apply for a loan, the lender should be able to verify your income. The best confirmations of your income are statements from your bank. And when your lender can’t check it, it won’t be able to approve you for a loan. But you can solve it by depositing the cash you receive into your account each pay cycle and there is a chance to be approved.

Reason 4: You Have Applied for Multiple Loans Recently

When you apply for a loan, every request will be visible in your individual credit file. Having multiple recent rejections on a credit record is also highly-likely to worry a lender. It can look like you have severe difficulties with your financial situation. Therefore, a very small amount of lenders will take the risk of giving you a loan.

Reason 5: You Didn’t Meet the Minimum Requirements

It’s vital to check the terms of your lender before applying for any online loan. It means that you should make sure you meet the minimum criteria listed on the lender’s website. There are always some age restrictions. For example, some of the companies are able to approve loan applications only for people who at the age of 21-65 years.

Reason 6: You Don’t Have Enough Credit History

If you have a limited credit history, it will also act against you. Lending companies want to see evidence that you are responsible for the debt. It could be due to your young age or you just have not previously had access to credit products. Without any doubt, it takes time to build a credit history.

Reason 7: There Was an Error in Your Application

Before issuing a loan, your lending company has to verify that you are who you say you are, that you live where you say you live, that you earn what you say you earn. This is both to assess risk/affordability and to protect against fraudulent applications. In this case, you should carefully check the information you give to your lender before applying for a loan.

Conclusions

Based on these facts, we can conclude that the most important criteria for lenders are your employment, income statements, lack of existing loans and suitable age. But it’s also important to note, however, that being eligible for any loan is no guarantee that your application will be successful, merely that it will be considered. So, it is important to consider all risks before applying for an online or the other type of loan.