We all face monetary challenges sometimes, and borrowing is often inevitable. For many Americans, bank loans are impossible to obtain due to their negative credit history. If you have borrowed but failed to repay on time, this tarnishes your status in the eyes of too many lenders. Tribal loans, however, may offer a way out.
Why is it possible?
You will still be required to provide a number of documents, but credit history is often less than crucial. A lender will need an ID document, some confirmation of employment and income, and a checking account that they will wire funds to – you will often receive tribal loans the same day you ask for them. Most lenders of this kind operate through the internet, which translates into speedy approval procedures and quick transfer of the requested amounts.
What is tribal lending?
This refers to the services rendered by institutions operating from Native American reservations. These are not subject to state or federal regulation, and they may, therefore, assist borrowers rejected elsewhere. Although the lenders have to belong to a tribe, their customers may come from any state they work with.
How much can you get?
Both minimum and maximum amounts vary, but most generally these range between $500 and $3,000, respectively. You may see also offers for as little as $100 or as much as $3,500. It all depends on the lender and their own special policies.
There are payday offers, where you have to pay back the lump sum at once, and installment schemes. With the latter, you may extend the period to 6 months or even a couple of years. Most importantly, the sum provided will help you cope with financial hardships and improve the affected credit score. Afterward, other types of institutions may begin to lend to you again.
Is there a catch?
You may hear criticism of such practices based on the relatively high APRs. Surely, the percentages like 450 in annual interest may look daunting, but reasonable borrowers repay their loans much sooner, and thus never get to the part with that much money. Besides, with a bad history, you rarely have any choice. Go over all the terms and conditions thoroughly before signing on the dotted line. If there are any fees, these must be clearly stipulated.
Is your score beyond repair?
A lender, including the conventional types, will always base their decision on several factors. After all, they have to check if you will be able to return the provided amount plus interest. What value makes you a hopeless borrower?
- FICO score usually falls somewhere within the 300-850 range.
- Candidates with scores below 620 have “bad credit”. This means that no large banking institution will give you approval. Nevertheless, you may try your luck with tribal lenders and receive a relatively modest amount on a short-term basis.
Many reasons may cause you to be in a financial bind, but there is a way out. Naturally, short-term loans with higher interest are not the most beneficial option. But if you need money fast, go for it. Always read the fine print and choose the conditions most suitable for your circumstances. The sooner you repay – the cheaper your loan will be.