6 Reasons a Tribal Loan May Not Be For You


Need a Tribal Loan for an Emergency Expense? Read This Before You Commit To Anything

If you’re in a desperate financial situation and need an emergency loan to cover bills, you’ve likely seen offers from tribal lenders.

Tribal lenders make it seem like their loans are a god-send. They promise you the moon, but often times leave you in deeper in debt.

So how do you know if a tribal loan is right for you?

The truth is, often times it’s not. And that’s why we created this article. To help you understand the downsides to financing through a tribal lender.

After reading this article, if you still want to take a chance, there are a few honest lenders you can work with. However, keep in mind that interest rates are still higher than a conventional loan.

Recommended Tribal Lenders for Consumers With Bad Credit

Big Picture Loans

Big Picture Loans has been around for a while and offers bad credit loans. They have great reviews and appear to be a trustworthy lender. You can read our Big Picture Loans review here.

Loan Amount: $200 – $3,500
Loan APR: 35% – 475% (depends on your credit)
Funding time: Within 24 hours


Opploans offers consumers with bad credit a wide variety of options, including personal loans, payday loans and lines of credit. They are not owned by a tribal nation and operate within the U.S. You can read our full Opploans review here.

Loan Amount: $1,000- – $4,000
Loan APR: 99% – 199% (depends on your credit)
Funding time: Within 24 hours

Reason #1: Tribal Loan Interest Rates Are Typically 300% APR or Higher

The average tribal loan interest rate falls between 50% – 300% APR. However, a large percentage of lenders charge up to 1,200% APR…and sometimes even higher.

This has become such an issue that the Attorney General in Michigan recently filed a lawsuit against tribal lender Sierra Financial.

One of their clients borrowed a $500 loan and ended up having to pay back $1,300.

Depending on how the lawsuit goes, you can expect AG’s in other states to follow suit.

Reason #2: Tribal Lenders Can Be Sketchy

From excessive interest rates to hidden fees and more, tribal lenders are often loan sharks in disguise. They are a great example of predatory lending at its best.

Here are a few ways tribal lenders scam consumers:

  • They charge unreasonable interest rates that exceed average rates of 300% APR. Which is high enough to begin with
  • They often charge consumers hidden fees without letting them know about additional fees upfront
  • They require automatic payments from your checking account and often take out your payment before the payment date

Reason #3: They Don’t Follow State or Federal Guidelines Which Protect Consumers

Lenders often think they are invincible. They believe that they can operate outside of federal and state laws, but this is not the case.

Typically, tribal nations are not part of U.S. federal and state laws. But when it comes to protecting consumers in the U.S. that live outside of a tribal nation, federal and state laws still apply.

Payday loan companies in the U.S. often partner with tribal lenders in the hopes that they can avoid U.S. federal and state laws.

However, this is not the case.

U.S. federal and state laws still apply.

Reason #4: Lenders Often Have Hidden Fees They Don’t Tell You About Upfront

Consumers that need a bad credit loan and need money the same day are often tricked into paying hidden fees. The problem is lenders hide these fees in small font disclaimers.

Most consumers don’t bother reading the terms of service. However, tribal lenders should make any fees, in addition to interest rates, more visible to consumers.

Some lenders don’t even put their additional fees in a disclaimer.

As you can see, lenders in this space are not transparent.

Reason #5: You Might Dig Yourself Deeper Into Debt

With astronomical interest rates, it might be tough to pay the loan off…or even pay it on time every month.

On a $500 loan, you might have to pay back up to $1,300…or more.

You should only get a tribal loan if you absolutely need it. Do not apply for this loan if you need it for long-term financing needs.

And if you decide to get one, pay it off as soon as you can.

If you need help with debt relief, here are a few resources you can use:

Reason #6: Borrowers End Up Paying Back Double What Was Borrowed

Most borrowers end up paying back double what they borrowed. This is a major benefit for lenders, but definitely a losing situation for consumers.

With sky-high interest rates, you’ll pay back double what you borrowed.  And, it will take you much longer to pay the loan off.

Bonus: Alternatives to a Tribal Loan

Sometimes, you’re better off not applying for a tribal loan. This is true for 95% of consumers. Here are a few lower-cost alternatives to try before you dig yourself deeper into debt:

Credit Union Loan

Local credit unions want your business. They offer low-cost interest rates and provide excellent customer support. They have big banks and lenders to compete with, so they must be competitive to win your business. And in most cases, bad credit isn’t an issue.

Secured Credit Card

With a secured credit card, there are two ways you win. First, you get access to credit which you can withdraw funds from (up to your maximum credit line). The second way is you can rebuild your credit by not using too much of your available credit and making on-time payments.


Tribal loans are usually not the best option. Only in rare cases where you need short-term financing and can pay the loan back quickly.

Be sure to read our alternatives above before applying to a tribal lender.

In most cases you can get a lower cost loan without being ripped off.

Got thoughts or suggestions? Let us know in the comments!

6 Reasons a Tribal Loan May Not Be For You
Brian Allen has been helping people make smarter financial decisions for over 10 years. As the Editor-in-Chief for Goloans, Brian writes about sage financial advice, "how to" articles, and reviews about lenders and creditors.