Tribal payday loans can look similar to traditional payday loans, but they should be avoided—this article will explain the difference between the two, examine potential benefits and dangers of tribal payday loans, explain the legalities of tribal payday loans, and answer common questions about them.
If you’re looking for a payday loan, you could be in a tough spot. But if you’re looking for a terrific car insurance
policy at a great price, you’ve hit the sweet spot! Signing up with Jerry
takes just 45 seconds, and the car super app will deliver more than 50 competitive quotes from the country’s best insurers right to your smartphone! Once you pick a policy, Jerry does everything else—from signing you up to your new policy to helping you cancel your old one. It will even search for better rates before each renewal period!! With an affordable car insurance plan, your car loan
will be even easier to manage. Jerry also has you covered with all you’ll ever need to know about tribal loans, so keep reading!
What are tribal payday loans?
Tribal payday loans are similar to payday loans, providing short-term advances of small sums of money usually to people living paycheck to paycheck.
Tribal loan lenders usually operate online and claim to be based on Native reservations. Under the Constitution, Native land is sovereign territory, and businesses that operate on native territory—including tribal loan lenders—are subject only to tribal laws and federal payday laws.
They are not subject to state payday laws, which tend to be much stronger than federal payday regulations. Many states have passed formidable laws to protect residents from predatory payday loans.
Tribal lenders (as well as traditional payday lenders) are known for preying on financially vulnerable people, and for the very high fees and exorbitant interest rates charged.
Key Takeaway: Tribal payday loan lenders, if based on Native reservations, claim to not be subject to state laws—which tend to enforce payday regulations more forcefully than federal authorities.
Potential benefits of tribal payday loans
Tribal payday loans are available to anyone, and they can be enticing if you’re desperate and short on cash.
Tribal lenders rarely check an applicant’s credit or income, and you can be unemployed, in debt, or in a financially precarious position and still qualify for a tribal payday loan.
Additionally, tribal lenders tend to offer more money than traditional payday loan lenders.
Potential dangers of tribal payday loans
Often, tribal payday lenders aren’t reputable—according to the Federal Trade Commission (FTC). False advertising and fraudulent billing practices are common in the industry.
Borrowers of tribal payday loans are often lied to about repayment schedules or how easy repayment will be. Perhaps unsurprisingly, tribal loan lenders are known to prey on those in financial straits, knowing they lack the time, money, or resources to carefully go over the rules and dangers of borrowing from a tribal lender.
Tribal payday loan lenders are known for charging burdensome high fees, exorbitant interest rates, and putting borrowers in danger of the following:
Losing loan collateral due to an inability to repay loans on time
Damaging their credit score
Receiving an APR of more than 100% of a loan’s value
Having their bank account locked by the lender
Key Takeaway: Borrowers face many dangers with tribal payday loans, including high fees, steep interest rates, damage to their credit score, and, ultimately, bankruptcy.
Are tribal payday loans illegal?
It’s complicated. Tribal payday loan lenders based on Native land aren’t subject to state financial laws, which often robustly regulate traditional payday loans. In contrast, tribal regulations and federal payday laws are weakly enforced.
Thirty-seven states have laws against traditional payday loans, but they don’t apply to tribal loan lenders based on Native land, and many tribal lenders argue they are outside the jurisdiction of those laws.
If you are considering a tribal loan, be sure to check with your state financial authorities for advice and guidance about what your protections are under the law.
Protect yourself with Jerry
Getting involved with any payday loans, traditional or tribal, can be risky business. Thankfully, getting a great and affordable car insurance
policy through Jerry
is the exact opposite! Using the Jerry app to get a fantastic car insurance policy is safe, easy, fast, and affordable. Sign-up takes just 45 seconds, and Jerry uses your current car insurance information to retrieve more than 50 competitive quotes from the country’s best insurers.
“I signed up for a new policy with Jerry’s
help. I ended up saving $236 a month after my switch. Thank you, Jerry!” —Adelaide C.
RECOMMENDEDNo spam or unwanted phone calls · No long forms
Tribal Loan FAQ
Saved $725 annually
4.7
