Most people that talk about Native American lending will simply lump all 100 plus tribal lenders into one big pot. They talk about these companies as if they were all just one big blob of companies, as if they were all just operating the exact same business model. But it's important to understand that there are some huge differences within the tribal lending industry.
If you think all of these companies are the same, or so similar that it's not worth discussing the differences between, then you are wrong.
There are differences and those differences are huge. Some companies will issue a loan that will be due in nine or 10 days, while others will issue loans that can stretch over two years or more.
Some of these lenders have APR's that are under 60% while others have APR's that bulge to 1000% and beyond.
Some companies will only loan you $300 while others will loan you $3,000. There are big, very distinct differences between the 100 tribal lenders. Now that's no to say there aren't a good number of similarities, too.
Many of these lenders have set-up very common terms and they start to get redundant, especially when you look amongst the Native American payday loan shops in particular, there is just an obvious deficiency of any creativity.
For example, more than half of all the tribal payday lenders have the exact same terms on their loan products which consist of the following scenario: issue a 14 day (ostensibly an emergency loan) that carries a 30% interest rate for the course of those 14 days, and which is limited to between $300 to $1,000 dollars in the loan amount. And all of the shops allow for the loan to be extended, which is where the tribal lenders really make the most money. These outfits always are quick to tell you that you can and should repay on your loan due date, but that if you do need to extend your loan it's okay for you to do that too.
Please, it's so obvious that they are just sitting their salivating at the prospect of many borrowers just opting to pay the finance charge. Talk about the original cash cow. These lenders know that a certain percentage of their borrowers are going to choose the path of least resistance and the least pain, and that means just paying the finance charge which is substantially less than paying off the entire loan.
This is not to say that the tribal payday lenders are all bad and the Native American installment lenders are all good. That's not the case because the installment loan companies are not great, it's just that they are not as bad as the payday lenders. It's the better of two evils, basically. Although I don't know that charging high interest is evil, it's more like just not very nice.
This is how the story ends, which is there is no good option when it comes to getting a tribal loan of any type. They are all expensive and they will all be costly to your personal finances. The key is that some will be more costly than others, and the goal is to find the best (least expensive) option. Plus, that needs to be balanced with getting the amount of money you need. If you want or need a loan for $1,000 then getting a $300 loan won't do you much good.
The tribal installment lenders like Plain Green Loans, Clear Creek Lending, and Mobiloans are better alternatives when compared to the tribal payday lenders like United Cash Loans, Ameriloan and American Web Loan. The installment loan companies offer better options, a longer time to repay, and lower rates. The payday firms offer not much at all, except low dollar amounts and high interest rates, along with a short amount of time to repay and really they don't offer anything at all.
If you must take out a Native American loan then go with the installment lenders for the better deal.