Sovereign Lending Solutions was a tribal lender that never got mentioned here at the site and there was a reason behind that omission. Unlike nearly ever other tribal organized lending company that issued the basic unsecured short-term loans that we are used (mostly payday loans and installment loans) the team over at Sovereign Lending Solutions decided to integrate their lending operation into a title loan format.
The fact that a consumer needed to own a car, and they would have to post up the title to the car, made this a lending company that was not worth our time to discuss even though they were technically a tribal lender.
Sovereign Lending Solutions was never going to be an option for this site, and that's not to say that every tribal company we look at is a "good" consideration because they are not. The reality is that over 90% of the tribal loan shops we review are not recommended and are often highly criticized for their terrible rates or cheap (small) loan amounts. However, one thing that all of the companies have in common that are featured on this site is the unsecured nature of the debt they offer. Whether it's a payday loan, a line of credit or an installment loan, all of the loans we review here (and the tribal firms that offer them) are always 100% unsecured.
An unsecured loan means that the only thing the lender has that says you will repay them is the signature the borrower puts on the loan document and that is it. A secured loan (like a title loan) gives the lender the ability to take something back from the borrower, like a car or a house. We never even considered mentioning companies like this but we did decide to make a note about Sovereign Lending Solutions now that they are going away, mainly due to the fact that we have a few people who have written in asking for a review on this tribal lender and were wondering why we constantly ignored the company.
There must have been a few other people out there who were just as unimpressed with Sovereign Lending Solutions (this company often went with the name SLS LLC as a shortened name) because it didn't take very long for the firm to go out of business. It looks like they organized somewhere in 2011 or 2012 and by the end of 2014 the company (what was left of them) was being sold as part of a bankruptcy discharge to some non-tribal loan firm called Car Loan Inc.
The lesson here for this company, and I think it's the same lesson that all Native American lenders need to learn from this situation, is that the consuming public is paying extremely high interest rates when they take out a tribal loan. The APR's from these companies can range anywhere from 59% to over 800% with many companies falling right around the (almost standard for the industry now) 782% which is the equivalent rate for a customer that agrees to pay 30% bi-weekly interest payment multiplied by 26 (potential) payments. It's hard to understand why anyone would want (or be willing to) pay this much money in order to get access to short-term funding. What good is a $500 loan where you get to have the funds for two weeks but the cost can quickly turn into double the amount of the original loan?
The answer is there is no good reason to engage in this type of financial transaction. Without a decent amount of time to have the loan in your hands, and the high costs of keeping the loan for any length of time (meaning more than 14 days) we just can't find a reason why a consumer would make that decision. And it turns out there must be a few other people out there with the same idea as we see SLS fade out and vanish from the tribal lending landscape.
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