Skip to main content

A payday loan is a relatively small sum of money lent at a high on the agreement that it will be repaid when the borrower receives their next wages. To apply for a payday loan in the US, there are some criteria that borrowers must first meet, including age and citizenship.

Each lender has a different set of criteria that they use to decide whether or not they will be eligible to take out their payday loans. This guide aims to help you get a better understanding of how lenders determine who is and is not eligible for their payday loan products.

How Old Do You Have To Be To Get a Payday Loan?

In the US, you must be at least 18 years of age to apply for a Payday Loan. Other criteria may vary between lenders, such as minimum monthly income and employment status, but age is among the basic criteria that most lenders consider.

Other basic criteria are:

  • Citizenship: You must be a legal US citizen
  • Work status: You must be working part- or full-time
  • Income: You must have a regular income of at least $800 each month
  • Bank account: You must have a valid current or checking account
  • Bankruptcy: You cannot have had a recent bankruptcy.

If you do not meet these basic criteria, your loan application will likely get declined early on.

Can You Get a Payday Loan with Bad Credit?

Capital Bean accepts borrowers with all types of credit histories, matching them with suitable lenders that are most likely to accept their loan claims. Not all lenders will eliminate people who have bad credit histories.


Capital Bean works with lenders with all types of credit histories and backgrounds.

Why Does Age Impact Loan Applications?

Age is considered by lenders due to rules put in place to protect young people. Bad credit history can follow you for the rest of your life, and lenders want to avoid burdening young people who might not make their loan repayments and therefore end up with poor credit scores.

Bad credit scores can leave people with higher debt, a future reliance on loans, and higher interest when taking out future loan products.

What Should A Payday Loan Be Used For?

Payday loans are there to help tide people over in urgent cash crises, so long as they have a reliable income. Common reasons that payday loans are taken out include unexpected repair charges (vehicles, boilers, etc), medical bills, or veterinary bills.

For example, if you unexpectedly broke a tooth and need to get it fixed fast, but you do not get paid until the end of the month, your payday loan can cover the bill. Then, at the end of the month, when you get paid, you can make your repayment.

Payday loans are not designed for frivolous spending, and should never be used by borrowers to help cover the repayments of other loan products. See what payday loans are used for.

what-can-i-use-a-payday-loan-forHow Much Should I Borrow And How Long For?

The amount you borrow depends on what you need the money for, and how much your lender is willing to give you. However, this is a decision that should be made carefully. With Capital Bean, you can get a loan from $100 to $35,000.

Payday loans are usually used to cover one-off emergencies, such as unexpected repairs to your car. This means you would be expected to pay the loan back come payday. You can choose a period of just 2-4 weeks, for example.

Larger amounts need even more careful consideration. Over-borrowing means that you could struggle to meet repayments on time, which will negatively affect your credit history. If you think you might struggle to pay large sums of money back, you might want to consider alternative loans.

You also have the option to pay the amount early, if you can. This will save you money on interest.

Why Was My Payday Loan Application Rejected?

The most likely reason your payday loan was rejected is that you have not met one of the basic criteria. These rejections tend to happen very quickly.

However, other reasons include not meeting the credit score requirements, not having a high enough income, or having an unfavorable debt-to-loan ratio.

Not Meeting The Minimum Credit Score Requirements

When you apply for a loan, your lender will carry out a credit check to get an idea of your credit history. They will want to see how well you have managed to meet previous loan repayments to get an idea of whether or not you will be able to make future ones in time.

Most loan underwriting systems are automated. This means that their rules are already built in, and anyone who does not meet this criteria (which vary between lenders) is screened out instantly.

Each lender has a minimum credit amount (e.g. 600 or 700). You will only pass on to the next stage if your credit score is higher than their minimum.

Capital Bean accepts applicants who have a variety of credit histories, so try not to let this information deter you from applying.

Your Income Is Not High Enough

Lenders can use your income to determine whether or not you are likely to repay your loan. The more money you make each month, the more you might be likely to meet your loan repayments. This gives lenders some reassurance, but each lender will require a different minimum amount.

For example, if you have a low income and want to borrow a lot of money, a lender can assume that you are living beyond your means and decline your loan.

Most lenders require a minimum of around $800-$1000 per month, but some lenders will accept part-time workers making only $500 per month. It varies between lenders.

Affordability And Debt-To-Loan Ratio

Your affordability and debt-to-loan ratio consider how much money you can afford to borrow compared to the value that you can afford to repay.

In other words, some people’s monthly income can technically pay their loan back with no problems, but they may have other outstanding obligations or loans open. This means that your paycheck is being split between many loan repayments.

Examples of other obligations can include rent, credit cards, and loans. Each lender has their own rules about this, but generally speaking, the less outstanding obligations you have each month, the more likely you are to have your loan approved.

Richard Allan

Richard Allan

Richard Allan is the founder of Capital Bean and a passionate writer about personal finance, budgeting and how to save money at home and work.

Leave a Reply