As if we didn't have enough Native American lenders we now have another company to review, this time it is a company called Dakota Lending.
Just a quick aside, it was really easy to spot this new tribal lender just by the name. When you think of the Dakota's you think of the Black Hills and Native American history.
Dakota Lending tries it's best to appear as if they are an installment lender, and on the surface there would be little to make you think otherwise. But a quick read through some of their FAQ page leads me to personally come to a different opinion, or at a minimum to question their claim about being an installment loan provider.
Here's the problem with the company assuming the title of installment lender...
All of the installment lenders in the near past (whether they were tribal loan companies or state licensed non-tribal entities) had a policy of lending a substantial amount of money for their installment loans.
What is the definition of "substantial" in this instance?
These lenders would start at $500 and go all the way up to $10K. And the $500 was not only the minimum amount available to borrow, it was also pretty much unheard of to take such a low amount for the installment loan. These loans would almost always be at least $1,000 and many times would average somewhere between $1,500 to $2,500.
Our friends over at Dakota Lending have rewritten the (unofficial) rules of tribal installment loans by offering a much lower amount of money for their products. Instead of getting an average loan of somewhere in the neighborhood of $2,000 we now have a range of $300 to $950 per loan, and the $950 is the top amount the company will provide.
If Dakota Lending follows the pattern that most Native American lenders do, then the upper amount listed as available (in this case $950) is usually reserved for returning customers and/or the best customers they have in their book of accounts. This means that the average (qualified) borrower (which is probably where you would land) will only be eligible to borrow $300 to $700.
This may not seem like much of a problem to you if A) you are not familiar with tribal lending or the history of what has been available with Native American loans or B) you simply do not care about getting a larger dollar loan and are perfectly happy getting a $400 loan that you can repay over the course of months.
For the rest of us who know a few things about tribal lending it's easy to spot a low quality loan from a distance and unfortunately for Dakota Lending this is one of those not so good loans. At the same time I will not say it's terrible, the company does not charge 35% on a bi-weekly basis and they claim that some of their borrowers will receive the 20% bi-weekly rate, which makes them better than more half of all tribal firms. Most tribal lenders will not budge off that 30% bi-weekly rate.
On a few levels the loan at Dakota Lending is not terrible when compared to similar tribal shops, however the problem concerning the low dollar amount is unavoidable. For my personal finances, when I have needed to turn to the world of online lending I have usually required more than $500 for a loan. It's a good thing to get some extra time to repay, this review is not a hit against installment loans in general. In fact, this site often discusses the "virtues" of taking out an installment loan versus a payday loan because with the installment product you at least have some options to repay, with an expanded time frame to pay if the customer needs that extra time.
Offering an installment loan with such small amounts of cash is not what I am looking for if I am going to bother going into debt. Why do I need several months to repay a $400 loan? This is an amount that is better suited to being structured as a payday loan.
Now, the fact that Dakota Lending can potentially offer this debt at a 20% bi-weekly rate instead of a 30% rate, that is somewhat enticing. But overall I am going to a tribal lender that is willing to offer a larger dollar installment lender, I personally want a company that is at least willing to offer $1,500 for a loan, and preferably up to a $3,000 loan.
Dakota Lending has some good aspects and I would not rule them out entirely but in general I am going to look for a tribal lender with better policies concerning their loan amounts.
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