Today’s low-credit borrowers have never had more loan product options, and those new products continually challenge the predatory lenders of the past who knowingly trap customers in debt.
Spotloan is a relatively new service in the payday lender category. Though, it doesn’t consider itself to be a real payday lender. The company began serving customers back in 2012. It doesn’t require a minimum credit score, and you won’t find any hidden fees when you use its service.
What you see is what you get with Spotloan. But does that make Spotloan the right choice for your finances?
Keep reading to learn if Spotloan is right for you.
Who is Spotloan?
Spotloan is an online lender that offers small loans to qualifying applicants.
The company is part of BlueChip Financial, an entity owned by the Turtle Mountain Band of Chippewa Indians of North Dakota. As a federally-recognized Indian Tribe and a tribally-owned entity, Spotloan falls under the laws and jurisdiction of the Turtle Mountain Band.
Spotloan’s existence provides opportunities for the Turtle Mountain Band in North Dakota. It is an important source jobs on the reservation, where unemployment is otherwise 65 percent. It also funds the tribal government’s community programs, which range from food and housing assistance, counseling job training, early childhood education, and more.
In other words, using the Spotloan system doesn’t just line someone else’s pocket. You get a loan, and the fees go to help a community in need.
What Makes Spotloan Different?
Upon approval, all borrowers work with a Relationship Manager. The Relationship Manager is a real person who works in Spotloan’s call center in North Dakota. They help ensure your payments remain manageable. Generally, you have up to 10 months to pay back your loan without penalty.
Spotloan’s terms also offer two unique services.
First, you can pay your loan back early without a payment penalty. This is a significant difference from traditional payday lenders.
Second, you can pause your payments temporarily if your account remains in good standing. Rather than pay the penalty, you can ask for a reprieve. However, Spotloan doesn’t make it clear if this impacts your loan or your standing for a future loan.
What If I’m Not a Member of a Tribe?
You don’t need to be a member of a Chippewa tribe to borrow from Spotloan. However, you should know that its terms may change because it is a tribal lender.
There’s nothing wrong with being a tribal lender, but it does mean that it falls outside state and federal law. As a result, state governments struggle to regulate them and states look for creative ways to try to reach these lenders.
Essentially, you need to remember that tribal lenders don’t need to follow the same laws as other lenders, and they are subject to the state’s creative attempts to slow or limit their practices.
Is Spotloan a Payday Lender?
Spotloan is a payday lender, and its inflated rates compare to traditional payday lenders. However, it more closely resembles a short-term loan lender, and Spotloan doesn’t like to style itself as being a payday lender.
Unlike payday lenders, Spotloan offers only installment loan, which means payments made go to the balance instead of balloon payments. The company also allows you to choose both your borrowed amount and payment size. Plus, there’s no penalty for paying the loan off early.
Spotloan says you can save up to 50 percent compared to borrowing the same amount from a payday lender.
However, you need to remember that its rates are still much higher than what a traditional bank or lender – or even another fintech company – will offer you.
How Much Can You Borrow?
Spotloan’s thesis is this: if you don’t have $500 to spare today, then there’s a good chance you won’t have it in two weeks either.
As a result, Spotloan lends between $300 and $800 on each installment loan. You can’t borrow vast sums of money that you already know can’t pay back.
How Long Does It Take to Get the Money?
If you apply and receive acceptance before 10 A.M. Central Standard Time (CST), then you receive your money the same day.
What are Spotloan’s Terms?
Spotloan’s terms change based on your history and creditworthiness.
You decide how much you pay back every two weeks based on the amount you borrow before you apply for the loan.
If you borrow $300, Spotloan estimates you’ll pay back a minimum of $58 every two weeks (21 total payments). If you borrow $800, you pay a minimum of $155 every two weeks (21 total payments).
The maximum interest rate applied to loans is 490 percent. Terms and payment schedules vary according to credit-worthiness and whether you are already a Spotloan customer.
Customers with a history of success with Spotloan receive preferential rates, but Spotloan doesn’t list what those rates are.
How to Apply
All applications take place on the Spotloan website.
Before you provide any information, you start by choosing your ideal loan amount and your preferred payment. You can apply to make only the minimum payment or substantially more. Everything occurs according to a fixed schedule.
To apply, you must provide the following information:
- Contact details
- Social Security Number
- Homeownership details
To be approved, you must demonstrate that you:
- Have a job (or another source of regular income)
- Have a checking or savings account
- Are at least 18 years old
- Provide a valid phone number and email address
In some cases, Spotloan will ask to verify your identity. To do so, you must send a voided check.
Is Spotloan Right for You?
Spotloan is a tribal lender that offers short-term loans at rates that resemble traditional payday lenders (around 450 percent). However, unlike payday lenders, it allows you to pause payments and doesn’t come with any hidden fees. You can even pay off your loan early without a penalty.
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