Tips for Payday Loans in Charlotte Area: Approval Process
Is Approval Guaranteed?
In short, the answer is no. There are no guarantees. Many people with low credit scores may have heard that they can get payday loans because they can’t be turned down. That is untrue. Now, you may be questioning your approval odds for a payday loan. Some lenders advertise with guaranteed approval, but unfortunately, this isn’t the reality of payday loans. Many lenders still pick and choose who they accept. You could be denied for various reasons, such as insufficient income. In addition, if they aren’t confident that you can pay the loan back in the allotted time, they will decline your request.
Lenders’ Criteria
Lenders have a specific amount of money they have access to, so they need to be picky about whom they lend. For example, they are most likely to proceed with a customer who proves that they can comfortably pay their loan back versus someone who may incur late fees and additional interest. While these things still put money in the lender’s pockets, it becomes riskier for them to lend to people like this since there is no guarantee that they will pay up. In turn, the lender may lose that money altogether and will have to make up for it later with other loans. The good news is that even if you don’t have good credit going in, there are still a few ways to increase your approval odds.
Helping Yourself Get Approved
Paying off outstanding debts is a sign of good faith. Although you don’t have the money to pour into large debt if you’re applying for a loan, setting up a payment plan instead of letting it go to collections will go a long way.
Also, before applying for any loan, check your credit report and dispute any errors immediately. This action will keep your score accurate. You can also incorporate some of your monthly bills into your credit score by asking your landlord or electric company to report on-time payment activity.
In addition, lenders like to see that you utilize your credit but don’t abuse it. Therefore, keeping your credit utilization ratio below 30% will positively impact your score over time. All these things can help your approval odds, so don’t be discouraged from trying to apply for a loan if you think you can pay it back on time.