Here is a new situation on the tribal lending news front, there is now a company that claims to have an automated method for providing funds to customers. The name of the firm is Peak Lender and they are a tribal lending company with a very modern and sleek website. Sometimes you will find the company referred to as "PeakLender" or "PeakLender.com" but it's all the same company.
Even though this appears to be just another Native American payday loan operator let's take a second look because it turns out they are not. I'm sure to the typical / occasional reader it sounds funny to say that we have located another (brand new) tribal installment lender but when you wander through the endless parade of payday lenders it becomes a real moment of success to find a company providing something different.
Now before everyone out there looking for a loan gets too excited the terms on this loan are not good by measure of a bank loan or a traditional (state licensed) loan that you would have been eligible for back in 2005. But it's 10 years later and the reality is we have to pick amongst the best of the worst when it comes to finding "reasonable" lending opportunities. On the other hand this company (and their loan products and terms) are most likely one of the best options that a person with little or no credit is going to want to find these days.
Below is a quick synopsis of the loans offered by Peak Lender...
The company offers first time borrowers up to $1,000 so it's a good idea not to get too excited over their 'Rates & Terms' page that displays loans up to $3,000. It's not that the $3K loan is impossible however we have to assume that this amount is going to be reserved for people with above average income. At the same time a decent credit score is not going to help or hinder a potential borrower much at all; since Peak Lender is a tribal lender they are not interested in the formality of your credit score or credit report.
Instead, it all comes down to the borrower's income (how much or how little), whether they are employed full-time or part-time (you can be sure the part-time employment will ensure a smaller loan amount) and the length of time that the would-be borrower has been at their current job. Native American lenders are starting to stress the importance of their borrowers having been with the same company for at least six months (and a few prefer you that you've been in place for at least a year) because they know customers who have been on the job for a very short period of time are more likely to either lose that job or to give it up, and then the lender is looking at a high rate of loan default.
There are two major reasons I like Peak Lender. The first benefit is the company offers longer term loans. Most tribal lenders are willing to lend money only for two weeks and then if you need more time to keep paying on the loan then you would have to (ask for and) get a loan extension.
This is a very costly process, it's often a hassle, sometimes you actually have to call up the lender and ask for the extension. This can be burden, a waste of time and it can be humiliating. Plus, tribal lenders tend to charge a 30% bi-weekly interest rate so each loan extension is another 30% of the outstanding amount essentially being thrown away. With Peak Lender you can establish a longer term loan right away. There example page shows a number of time frame options with eight weeks being the shortest loan displayed and the longest loan is 38 weeks.
This is a world of difference when compared to the very compact function of getting a loan and planning on repaying it within 14 calendar days. This is generally a bad idea, and why so many consumers even attempt to put some degree of function into their finances with this tightly bound, expensive form of debt always amazes me.
The second reason I like this lender is because they allow up to $3,000 in a loan to an individual. Most Native American lenders tend to top out around $500. A few will go to $800 or $1,000 but almost none will get up to $3K. Peak Lender reminds me quite a bit of Plain Green Loans. And just like Plain Green the managers over at Peak Lender realize that if a borrower takes on more of a debt load (like the $2K or $3K) they lower the interest rate associated with those higher loan amounts. The drop in the APR is pretty stark as you get above the $2K level. For instance a loan for $2,200 will be issued at a 139% APR. But a loan that is issued for $3,000 will be for just over 59% APR.
The theme here is that to get the better interest rate you need to borrow more money. However, one method that you (the consumer) may want to try with Peak Lender is to try to bring down those lower annual percentage rates to match the lower lending amount. In other words you would have to negotiate with this lender and indicate to them that you are willing to borrow $2K but you want the APR normally assigned for the $2,800 loan level.
The difference between those two rates is as follows: 159% APR vs. 79% APR
Notice the stunning drop in rates just for borrowing another $800. The margin of difference is not that much either. It would be one thing if a customer was going to borrow $500 or $2,800 where the differing amount is quite noticeable. But going from the $2,000 level up to the $2,800 level is not much of a jump, yet it results in a massive drop in the cost of the loan.
One more quick note about Peak Lender, and although they are pushing this concept it seems to make the least sense. Peak Lender claims to be the first "automated lender" as if all a client does is plug-in their information and some robot will be making the loan decision and sending the funds automatically. I'm sorry but who could possibly believe that scenario? And even if it is true, that somehow there is an automated sequence of events taking place, so what? Does a borrower care at all how their loan is constructed? The answer is a resounding "no" the customer couldn't care one bit. Whether it is a machine or a person making the decision, the borrower just wants to get the loan approved and they want the money sent as quickly as feasible.
Peak Lender is a good alternative to Mobiloans if that lender is no longer available in your state. Just like Plain Green Loans and Great Plains Lending, the team over at Peak Lender are offering larger loans which can be repaid over the course of 38 pay periods. Getting a loan for more than a year is not too common amongst tribal lenders. Peak Lender is definitely worth a second look.
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