SPOTLOAN HAS THE FEWEST COMPLAINTS OF ALL TRIBAL LENDERS

Yes, it's true, I am a big supporter of Spotloan.  No, I'm not a shill for the company.  I had an email message recently that implied that I was somehow part of Spotloan or a paid contractor, or a secret employee.  None of those could be further from the truth.  I don't have any alliance or arrangement with Spotloan.

The only thing I do have at Spotloan, like so many thousands of other Americans, is an account.  As a previous customer to Spotloan (and by the way, I am a returning customer to Spotloan, as I have paid off my third loan with the company) I have nothing but good things to say about the firm.  I believe as time marches on there will be more folks like me, who are happy that Spotloan exists and that they are so lenient when it comes to issuing a $700 or $800 installment loan.

What a lot of Americans are going to experience over 2014 (and the years to come) is that many state governments have had it with short-term lenders getting their constituents in big financial trouble.  The answer they have cooked up is to have the state's financial regulators get in bed with some third party financial monitoring services (for instance in the state of Illinois it's a provider called Veritec) that will watch to see how borrowers in that state are behaving.  And there are two big drawbacks that borrowers will be finding with these new monitors.

First, it will no longer be possible to take out a second short-term loan while the first one (a current loan that has not been fully repaid) is still outstanding.  This doesn't sound like a big deal, and to people who make a good living it never will be an issue.  But for people who are going paycheck to paycheck and who are squeezing by in life this will become a substantial hurdle in their financial daily lives.  A borrower will not be able to get a second loan in order to repay the first loan and then have whatever balance is left over.  That game of financial musical chairs (which more people play that you would imagine) will be coming to an end, and in many states it already has concluded.

Second, there are more than a few borrowers who made the decision not to repay a payday loan company or an installment lender.  Maybe the borrower (customer) could not make the payments or perhaps they simply decided not to pay the money back.  Either way that debt went into a default status and almost certainly the customer was moved to a collection status.  No big deal, at least in the past.  The debt went unpaid but the borrower often had other lending companies (other lending relationships, many already that were pre-established) so they (the customer) could turn to these other lenders even as the one loan slipped into default at another company.  

That form of selective repayment, where a borrower actively chooses to repay one firm while stiffing another lender, will no longer be a viable strategy.  These same third party monitoring companies (like Veritec in Illinois) will keep track of which loans are listed as paid and those that are still outstanding, which will include those loans that fall into default.  So this has all been a long way of saying that borrowers who decide not to repay short-term loans will be cutoff from future short-term loan products by their state government.  

This creates a big problem for thousands of borrowers who were unable (or unwilling) to repay their loans which now have slipped into past due status or default status, and a huge number of penalties and fees have been added to the amount due.  These folks will be effectively removed from consideration for future loans.

These new state laws and regulations are one of the main reasons why tribal lenders exist at all.  The other big reason is the fact that the banks stopped issuing unsecured loans.  They just walked away from much of the personal loan market, they had other ways to make money that were safer so the concept of taking a chance lending money to a customer that was not secured by a car or a home was just no longer much of a desire for banks.  These two big changes to the personal lending industry has opened the door wide for Native American lenders to fill the breach left behind by the banks.  

The lower end of the American consumer needs credit and the tribal lenders have opted to be the creditor of last resort for these largely desperate Americans.  Spotloan is one of the big companies operating in this space but we do have to make one big distinction here.  Most of the tribal loan companies are payday lenders, where they will issue a pathetically small loan and expect the money to be repaid in a ridiculously short amount of time, usually less than 19 days.  

The other branch of the tribal loan business are the installment lenders.  Spotloan falls into this category.  Native American installment lenders such as Spotloan issue loans that last for roughly six or seven months.  This can be a real benefit for consumers who are on the edge financially and need help for more than just a few days.  Spotloan has flexible repayment terms and the first repayment date can be negotiated, within reason.

This brings us to the complaints.  One thing that is very telling about how good or how terrible a tribal lending company is the number of complaints that can be found floating around on the internet.  Some of the lowest operators in tribal lending, such as United Cash Loans and Ameriloan, have hundreds (or possibly thousands) of complaints scattered across the net.  But it's very telling when a tribal loan firm has only a few complaints.  

This is the situation that Spotloan finds itself.  Despite being one of the most popular tribal lending operations over the last few years and having many thousands of customers, and it should be noted the company does a lot of advertising, there are only 27 total complaints listed against this company at the BBB.  That's the Better Business Bureau in case you aren't aware of this organization.  

The BBB is one of the major inventories of business complaints in the United States.  And for Spotloan to only have 27 total complaints over the last few years on the books is a very good sign that the lender is one of the better tribal options out there.  That's not to say that Spotloan is a great company, they're not.  They do have very high interest rates just as all Native American loan companies do.  But to have less than 30 complaints listed for multiple years of active lending (at least three years, possibly more) the company must be doing something correctly.  It should be noted too that of the 27 listed complaints the majority had been responded to by Spotloan and most have already been resolved.

Spotloan is an above average tribal lender.  With the lending market moving briskly away from unsecured loans and all forms of unsecured debt, it might be a good decision to consider Spotloan as a potential source of credit rather than many other tribal loan firms.  At least you know you will be getting a company that has far fewer complaints lodged against them which right away tells you the lender has better terms and is a little more responsible than many other lenders in the same category.

Comments

[Native American Loans]

Spotloan gets an 'award' from Native Loans - this is one of the oldest, best rated Native American lenders out of over 400 companies reviewed in this group. Many Native loan companies have gone out of business, merged with other lenders or their sites have been transformed into 'standard' lenders that are operated as a state licensed company. But Spotloan has stayed steady in their mission and they continue to offer one of the better products.