Sometimes a tribal lender company doesn't have any business with the public at all but instead sits behind the scenes operating the machinery that gets the thousands of loans issued up and operating. That's the situation for a tribal lending entity called Make Cents Inc.
Make Cents Inc. is a tribal holding company that is the full owned of two other tribal lending firms called Cover Me Cash and Sovereign Advance. In case you're wondering both of those companies have been reviewed by this site, the Sovereign Advance article here and the Cover Me Cash post here. Make Cents Inc. is the tribal ownership company, so you wouldn't call up the phone number at Make Cents Inc. and ask for a loan. They would say no and direct instead to either Cover Me Cash or Sovereign Advance.
Unfortunately for Make Cents Inc. I'm not too thrilled with either of their lending properties. Sovereign Advance is a short-term lending company that doesn't even come close to the opportunities that Mobiloans provides for higher dollar loans, more flexible loan terms and lower interest rates. And Mobiloans just has a better known name which to me gives us just a little great reputable brand to work with.
The situation is pretty much the same for Cover Me Cash, although I will say that I have made an allowance for people who are interested in borrowing from this tribal lender. Don't get me wrong, this definitely isn't an endorsement but I like a few things about Cover Me Cash especially when compared to most other Native American lenders. The biggest problem I have with Cover Me Cash is that they are one of these new tribal lenders that are trying to merge the tribal payday lending business model with the installment lending model.
How does that work? Basically it involves a very small dollar loan (Cover Me Cash uses a $400 loan in their FAQ page example and that's probably right around what they would be willing to lend to the average borrower) and then they stretch the repayments over 12 pay periods, which is 24 weeks. Do you really need to 24 weeks to repay $400? The answer is definitely "no" it should never take that long and there is no reason to structure a small dollar loan for that ridiculously long timeframe.
It's funny, I used to (and still do) complain about tribal payday lenders that would offer a short-term loan with the hopes that the customer will not be able to repay the full amount on the repayment date. That would inevitably lead to the infamous extension.
When a customer takes out an extension on a short-term payday loan all they're doing is saying I want to part with the least amount of money on this particular payday, and the lender says "sure thing" and all they want is the finance charge (that's the interest payment) for the timeframe that has just ended which is 14 days.
Then the process starts all over, where the lender is hoping the customer will be short on funds again in the next 14 days. And the next 14 days, on and on. Meanwhile, the borrower is hoping they can scratch some funds together to actually payoff the miserable loan but there's a really good chance they will not.
It's a cynical, creative and highly effective business model that wasn't invented by the tribes but certainly has been more perfected and used to a great extent by them.
But let's get back to Cover Me Cash, because they are moving this already profitable model to the next level. Well, I should say that Make Cents Inc. is moving it to the next level since they own Cover Me Cash.
Now the strategy is to not dance around with the fact that each customer payday could result in the end of the loan. Since the technical life cycle of the loan was only 14 days it's always a question, for both the borrower and the lender, whether the loan will be paid in full on the payday or if there will be an extension requested. The new model takes away this guessing game by just structuring what should be a payday loan (it's the same dollar value as a payday loan) but what Makes Cents Inc. decided to do is assign 12 repayment dates to this payday loan, effectively morphing the debt from a payday loan into an installment loan.
The terms are not much better for having switched to an installment loan. And usually you would equate an installment loan as carrying a lower interest rate than it's payday cousin. But not with Cover Me Cash. In there most embarrassing example (on their site) they have a $400 loan that has $120 repayment dates for the first four cycles. Then it actually gets worse, as the 5th repayment date is $170, the 6th repayment date is $155, and so on, you get the grotesque idea here. And don't forget this was for a very limited $400 original loan amount.
Is this crazy? This is the land of the super profits. Instead of the company being called Make Cents Inc. the company should be called Make Incredible Stacks of $100 Bills Inc.
That's the story of Make Cents Inc. but I'm not very interested in them. If there interest rates were lower (for either Sovereign Advance or for Cover Me Cash) then I would take more interest. The other option would be if Cover Me Cash offered a much higher loan amount, similar to Plain Green Loans $3,000 offer, then I would be more interested. But as it stands now I can't say that either company looks very good to me. So can we say that Make Cents Inc. doesn't make sense? Yes, absolutely, and on top of that we know there are better offers out there in the world of tribal lending.
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