The latest, but not greatest, tribal lender to start issuing short-term loans is a company called Fast eFunds. The company sometimes is found as "FasteFunds" or "Fast Efunds" but no matter how the company is presented this is all the same operation. And speaking of the same operation it turns out that Fast eFunds is (yet) another provider of the famous Go Loan program that so many other Native American lenders have been participating in.
Technically, the holding company that owns Fast eFunds also owns at least five other tribal lenders, and most likely there are even more firms that I have not found at this point. Plus, I believe this holding company is buying out other tribal enterprises in the hope of rapidly expanding the Go Loan product.
The Go Loan is just another term (a branded term) for a short-term loan offered by this outfit. The company tries not to disclose too much information about the loan, other than to point out how great the loan is, even though we aren't in a good position to compare the rates or the APR to other Native American loan companies.
Fast eFunds gets out of telling us this important information by using one of the oldest lines in online lending which is "the terms and APR (annual percentage rate) charged for your short term loan will depend on the individual applicant information you provide" and that is just another way of saying we are not publishing our rates.
The truth is most customers will (probably) be charged a 30% bi-weekly interest rate, meaning the borrower will be in a position to pay 30% of the outstanding principal on the loan for every 14 calendar days the loan is not repaid. Whatever portion is not repaid the borrower will be facing the same 30% payment on that specific amount and this will continue for every two weeks the loan is outstanding.
Some tribal lenders only provide the 30% bi-weekly rate. The folks that supply the Go Loan (like Fast eFunds) probably do use a rated scale of 25% for good credit, 30% for just about everybody and maybe the dreaded 35% for people with truly terrible credit or if they have no established credit at all. It is slightly possible they are providing some loans at the 20% bi-weekly level, maybe for customers with a stellar credit record and if they complain that they want an improved interest rate, but that's doubtful. If you are average (meaning you are just about like 80% of the rest of the world) then you will be in line to get a 30% rate from this group.
Why don't we know for sure what kind of loan costs we will be experiencing? Below is the disclaimer the company gives and this is taken verbatim...
"The short term loan offer documentation discloses completely your loan APR and
any associated fees."
Isn't that quite simple? Unfortunately for us as consumers it doesn't help us make up our mind about whether we want to go ahead with Fast eFunds or not. When I personally encounter this type of situation though it is very clear what I need to do. I only like to deal with lenders that are very clear and publish example rates on their website. This is what you'll find at the larger tribal lenders, with companies like Plain Green Loans, Great Plains Lending and Mobiloans all displaying their rates. And these are rates for all customers no matter what their credit standing or credit score happens to be.
Fast eFunds is new company and their website is easy to use. They make an enticing offer but it's one that winds up being a bit hollow for my own evaluation. Consumers do not like to transact business when they are unaware of the costs.
We wouldn't buy a car or a bottle of ketchup without knowing the costs, we wouldn't take a vacation without knowing how much the hotel will be charging us, so why do I want to provide all my personal information to an online lender who will not disclose what my costs will ultimately be.
Yes, I realize they will disclose that information once I have applied but that is missing the fundamental (and unfair) problem of we (as consumers) should not have to wait until that point in the process. If they want to advertise the fact that they have some loans to offer then they should say something like the "average cost is XYZ" but instead we get some fine print. If I am going to give you my social security number I want to you to describe to me ahead of time what I am getting into and the associated costs. Or I am not interested.
Recent Comments