Tribal loans are offered by tribal lending entities that operate from various native reservations around the country.
The Native American Financial Services Association represents most of these lenders and encourages them to offer online alternatives to payday lending.
Keep reading to learn more about tribal payday loans and what they have to offer.
Traditional payday loans are funded with a single repayment date, requiring full repayment at the borrower’s next payday. For most people who are already in a tight financial spot, this can be prohibitive.
If they can’t pay when the loan is due, more interest charges and fees are added, and it quickly turns into a financial avalanche.
Tribal lending alleviates this issue for borrowers by offering installment loans.
They calculate the interest for the life of the loan and add it to the amount borrowed, which is then divided into bi-weekly or monthly payments to determine the length of the repayment term.
The number of payments will depend on how much is borrowed and the terms of the specific lender.
In most cases, anyone with a source of income is eligible to apply for tribal loans. Good credit is not required and there are no other special eligibility requirements, as is the case with most payday lending services.
The application process will typically request your personal, financial, and income/job information to determine eligibility.
The biggest advantage of tribal lending is that the loan does not have to be repaid in full as soon as your next payday. Especially when you have a big financial emergency, coming up with that money in a short period can be difficult.
A tribal loan will have low monthly or bi-weekly payments, and will usually even allow you to pay extra or pay the loan off early with no penalty.
These loans may be available in states where traditional payday lending is illegal, offering a solution for people who need emergency funds and may have no other means of obtaining them. Plus, tribal loans are available to all consumers, including tribal and non-tribal applicants.
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