Most of the time at this site has been dedicated to comparing one tribal lender to another, which was the original intent of the whole project. No one else is examaning Native American loans in any depth so the idea was to create a hub where people could learn about tribal lending in the United States and have a directory of all the tribal loan companies that are currently available. And so that's the way it's been.
Now it's time to branch out a little bit and start comparing tribal loan firms to othe lending companies (lenders that engage in personal loans, not mortgages, car notes, etc.) that are not tribal entities, but instead the average state licensed corporation or LLC which are the type of companies that we are all used to dealing with, whereas the tribal lenders have a unique Native American business license that exempts them from a number of regulations and rules.
These "standard" companies as I refer to them also offer personal loan products that are issued based on the customer's signature only with no collateral posted to get the loan.
The question is, how do these standard lenders match up to the tribal lenders? Well, there are two quick facts that make themselves evident when you review the two. In this case we will compare Springleaf Financial, which is a medium sized signature loan company that has a strong internet presence along with some brick and mortar stores, to our old tribal lending favorite, Great Plains Lending.
The first piece of information that jumps out is that using the standard lender, Springleaf Financial, is a cheaper option. There's just no other way to say it, other than Springleaf is just got much better interest rates.
But does that really matter? Normally it would make a big difference but for most people (hopeful borrowers) it doesn't matter a bit. That's because slice of information number two is that almost no one will qualify for a Springleaf Financial loan. When I say no one, we can translate that as roughly a 12% to 24% interest rate spread for their customers. There is no hard numbers for their loans, but it's safe to say the average loan interest will be at least carry a 16% APR.
Springleaf is also far superior when it comes to the duration of the loan. Whether it's three years or five years, the amount of time a borrower gets to repay the Springleaf loan is so much better than the days, weeks or months that most tribal lenders provide their customers. A few Native American loan companies allow a loan to get beyond one year in length but that is quite rare, less than five of all the tribal lenders would permit a loan to last over one year.
Finally, the amount of money available is so much greater with Springleaf. Nominally, the firm is willing to lend $10,000 to an individual borrower however most customers will not qualify for this much. Even so, a loan for $3K or $5K is going to be so much more helpful than a tribal loan for $500 or $1,500.
On all fronts, in all ways, the Springleaf loan is a much better option than going with any of the tribal loan companies. The only problem with Springleaf is that they are a state licensed lender and they will be much harder to get an approval for their loan products. The firm is more selective and pretty demanding when it comes to credit scores and credit histories. Less than half of all applicants will be accepted by the company and probably much less than 50% of applicants will be accepted.
This is why tribal loans continue to exist and in recent times, flourish. It's due to the extremely easy application process and fast approvals that follow. Even though it's very expensive the Native American loans are the easiest money to get your hands on, especially if you have sketchy credit scores or any negative items on your credit report.
But given the assumption that you do (as a potential or hopeful borrower) have a good credit score and that you could borrow from either Springleaf Financial or a tribal loan company, the answer could not be more straight forward. Go with Springleaf.
Recent Comments