BIG PICTURE LOANS

Just when you thought we couldn't manage another tribal lender we have a brand new company for 2016, it's Big Picture Loans.  The company claims to be an installment loan provider and that is most likely technically correct.  However, as we have discussed at this site many times there is the very strong possibility the firm is offering what we have started calling the payday installment loan.

Payday installment loan?  Isn't that confusing?  If I have a payday loan then shouldn't it be repaid when the next payday arrives?  A payday loan should never need a series of installment payments to get the debt paid in full.  And even if the borrower is not able to repay in full by the end of the loan then they can take an extension on the loan.  That's how a payday loan is supposed to function.

Instead, we now have this payday installment loan.  In this new unfortunate scenario the borrower gets to borrow the equivalent funds of a payday loan (which is usually between $300 to $500, usually topping out around $800) and then instead of making the loan due on the customer's next pay date these companies (like Big Picture Loans) are providing with a list of repayment dates.  This is the new world of "lending" as we see the new future unfold now.  Didn't some politician somewhere say this is going to be the new normal?  Going into long-term debt over a $300 loan seems to be the epitome of a consuming public that is hitting rock bottom.

But not to the team over at Big Picture Loans.  This is their business model, as they offer the "consumer installment loans" to their customers.  Another interesting thing I noticed about Big Picture Loans is the very low amount that of money that a potential borrower needs to be making in order to qualify, it's a stunningly low $700 a month in total income, and this is before any taxes or withholding.  That was a surprise, this figure used to always be at least $1K, sometimes you would see $1,100 or $1,200.  The top amount you see as a requirement is $1,400 or $1,500.  However, the $700 amount is easily the lowest qualifying gross income amount ever seen in the world of tribal lending.

Big Picture Loans reinforces the concept that they are a Native American lending company a few times on their site, which means any loan that you take from them will not be subject to any state or federal rules or guidelines. 

What about the interest rate used by Big Picture Loans?  Well, it is quite big in fact.  This tribal lender breaks away from the pack (most tribal lenders are using the 30% bi-weekly rate right now) because Big Picture has decided to use a 35% bi-weekly rate.  Now they do not push this point very strongly however if you head over to their rates page you will find a nice little calculator that helps you determine your first repayment to the company.  For a $200 loan the first repayment date (which is also listed as a 'pay in full' date should you so choose) is listed as $270.

That means if you want to repay your loan on the first payment date you would owe $270 to the company.  And we know that in this scenario you borrowed $200.  That means the $70 is the interest charge that Big Picture is putting to you.  We can quickly do the math and see that $200 x 1.35 (which just means you are building in a 35% rate plus the original amount that was borrowed) = $270 due to be paid.

In the end we have a consumer installment lender (whatever "consumer" means I don't know since all tribal lenders deal with lending on a retail basis to individuals, they are not making business loans) for small dollar amounts, at a 35% bi-weekly interest rate.  This is not the type of loan that I personally am looking for, both due to the high interest rate and the low dollar amounts available. 

By the way, the lending calculator that Big Picture provided shows displays loans ranging from $200 to $1,000 but I highly doubt many customers are qualifying for the $1K loan, and I also doubt many are getting the $700, $800 or $900 loans either. Perhaps 10% or 15% of the total of all qualifying applicants.  You can believe that the large majority of applicants are going to be offered loans between $300 to $500. 

This is simply not the type of company we are looking for.  The cost structure is not very good, the loan amounts are not very good, we just are not being offered much here.  Big Picture does probably do a great job on the turn time to get you a loan.  They promise to call you within 15 minutes of your loan application during business hours.  And the loan can be completed in just minutes.  But who cares?  And besides are you surprised?  If we were charging 35% interest every 14 days I suppose that we would be on the phone very quickly as well to make sure we nailed down that contract as well.

Comments

[Brenton]

What is this companies contact info? Do they have a website?

[Kevin Robeson]

This is a completely fraudulent lending company. For a $800 loan you repay the first 5 installment of $400 each which is just interest only. Then you start on repaying the principal. After all the payments are done you repay $5,400 for an $800 loan for 21 months. When you try to cancel in the 2 business days given, they ignore the faxes you send, customer support hangs up on you when you tell them you want to cancel the loan. I finally today sent it by registered mail to them. They tell you, you must cancel by email, fax or calling none of the above methods work, they just ignore you.

[Native American Loans]

Hi everyone, a quick update on Big Picture Loans - they are now using snail mail advertising. I received two Big Picture Loans branded letters inviting me to take out a loan from them. This is 100% incidental, as I have never applied for a loan with them or even contacted them in any way. Pretty funny, they must be carpeting the land with these mailers. It's a basic letter just offering you an easy to get loan. Native American lenders don't normally take this action so they must feel emboldened or desperate, one of the two.