Borrower eligibility requirements (composite profile):
- At least 18 years old.
- A US citizen.
- Resident of a state where the lender does business.
- Employed or have a verifiable source of income (the lender may require a certain minimum monthly income).
- Have a checking account in good standing at a separate depository institution (no overdrafts, bad checks, or other problems within the last 30 days).
- Valid e-mail address.
- A poor credit record may not be a deterrent to borrowing; tribal lenders do not perform credit checks on applicants.
With respect to tribal lending organizations, the following information applies to one of the larger lenders:
- The APR ranges from just under 450% on a $200 loan, to almost 200% on a loan of $1,500 (the largest loan made).
- First-time borrowers are limited to a $1,000 loan; return customers with favorable loan servicing records can expect to be able to borrow larger amounts at lower APRs.
- The base term on any loan is 14 days; loans can be extended up to 3 times on the same terms as the original loan.
- If a loan payment is missed for any reason, additional charges may apply.
- One lender states that “repayment terms can range from 4 to 15 months, depending upon loan amount.”
- Charges may be assessed for late payments; as with all other loan terms, these charges are disclosed only in the “loan agreement.”
- $250.00 total amount financed
- $43.15 finance charge at 450% annual rate
- $293.15 total payments on loan (450% annualized index of borrowing cost)
Note: representative terms and conditions for internet-based unlicensed tribal-lending entities fees and interest schedule on a $250.00 loan
Who are they?
Located on – and operating from – a native american reservation, these organizations solicit short-term borrowers through internet websites and TV ads.
The tribal lending process is straightforward:
- Short loan application online. Decision follows shortly after submission
- Once approved, loan proceeds typically are deposited in customer account as soon as the next business day.
- Some lenders limit the amount on a first loan to $1,000 (or less) and then allow returning borrowers (who successfully serviced the first loan) to borrow larger amounts (e.g., up to $2,500) at lower rates.
- Some tribal lenders advertise loans as high as $10,000.
- Consumers who visit a tribal lending website may be told that full details are provided in the lender’s loan agreement (which is not posted for public inspection).