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What Checks Are Made For Payday Loans?


If you are looking for a short-term solution for an unexpected cost then a payday loan could be the best option if you have exhausted all other avenues of potential emergency money. You may need to borrow 1000 dollars for example to get you through until your next payday and pay off some unexpected bills and expenses. No matter what short term loan product you apply for, it is more than likely that some checks will be carried out by lenders to assess and evaluate your suitability for the loan.

When you apply for a payday loan, installment loan online or other short term loan option in the USA, it is likely that you will be subjected to a few basic checks to make sure that you are suitable for the loan that you have applied for and the lender will make sure that they believe you can afford to repay the loan as well.

No matter what type of loan, including installment loans or bad credit loans, as well as how much you are looking to borrow, lenders do not want to risk not being paid back and therefore will check your financial history to see if you are suitable for a loan.

There are a few different types of checks that are carried out when you apply for a payday loan including making sure your personal information is correct as well as an overall credit check to look at your financial history.

In this guide, Kallyss will take you through what checks are carried out for a payday loan, how they affect you and what is included in them.

Is a Credit Check Carried Out For a Payday Loan?

In short, yes, a credit check will be carried out on you when you apply for a payday loan. This does not matter whether you are looking to borrow $500 or just a small amount such as a $100 loan. Lenders want to make sure that you will be able to pay them back and they do this by assessing your credit history in the form of a credit check.

Your loan will depend on approval from the lender after your credit check. Through the credit check the payday lender is able to see all of your financial history and credit history as well as get real-time information about the status of your current debt or loans.

If you have a good credit score then a credit check will quicken the process of you getting the loan that you requested, however, although possible it might be harder for you to get a payday loan if you have a bad credit score when your credit check is happening.

Does a Credit Check Affect My Credit Score?

This depends on the type of credit check that is being taken out by your lender. When Kallyss finds the best payday loans for you their provide soft credit searches which means that they will have absolutely no impact on your credit score.

A credit check will leave a credit footprint on your credit account; most payday lenders will only leave a soft credit footprint after completing a credit check meaning that it will have no impact at all on your credit score. However, it is possible that a hard search will be carried out and this will stay on your credit record for up to 12 months. Although this does not directly damage your credit score, other lenders will be able to see that the credit check has been taken out.

Lenders might be put off by a credit history that has many credit checks on it and will be a wary that this person is only taking out a loan to pay another one off!

What is Included in a Credit Check?

A credit check is used to make sure that all the details you have provided on your application for your loan is true, that means that included in a credit check is the lender looking at a number of your personal details including:

  • Name
  • Age
  • Address
  • Card details
  • Repayment history
  • History of arrears
  • Outstanding debts
  • Products including loans, mortgages, phone bills and credit cards
  • Joint accounts or people you are associated with financially e.g. checking accounts, mortgages and more

Making sure that you have paid back all your previous loans on time and do not have outstanding debts will make the credit lender more likely to accept your application for a loan. Moreover, the less credit cards that you have open and the better your history of arrears, the better your prospects for securing that loan, whether looking to borrow 400 dollars or get a 600 dollar loan.

What Other Checks Are Carried Out When I Apply to Borrow Money?

If you apply to borrow money online instantly, or at all, lenders will also make sure of a few other things before approving your loan including:

  • Over the age of 18
  • Full-time US resident (and living in a state that allows payday loans such as Texas, Illinois, Ohio or Indiana)
  • Employed and able to affordable repayments
  • Valid US bank account
  • Valid US mobile phone number

Can I Get a Payday Loan With No Credit Check?

Finding a payday loan without a credit check is unlikely and usually not necessary. Credit checks will not have a large affect on your credit score and if you are trying to hide something that it may be worth considering alternatives to payday loans such as borrowing from family and friends. Not paying back your payday loan can have big consequences and therefore it is always best to make sure that you will be able to make repayments on time before applying for a loan.