What are Tribal Loans? 5 Things to Know About Them

What ticks on your mind if you hear the term tribal? Well, it might not be something good considering the discrimination that we have heard over the years. However, you don’t have to worry about discrimination right now.

Let’s know more about tribal loans.

What are Tribal loans?

Tribal loans are the ones that Native Americans or Indians give out within their tribes. However, tribal loan lenders can still accept online applications even from those who don’t stay within the tribe line.

Many times, tribal loans lenders market themselves as alternatives to payday loans. However, they are not that better than the payday loans themselves.

Personal loans, however, are not permitted in many countries sure to their high and exceptional interest rates. The high interest rates often make the repayment to before hectic and troublesome.

That’s why we have these lenders who have coated themselves as tribal loan lenders. But they still siphon the high-interest rates from unsuspecting borrowers who need emergency cash.

The Consumer Financial Protection Bureau (CFPB) has no specific meaning of tribal loans and how they should operate.

Tribal loans are far different from actual payday loans because they charge a higher interest rate than ordinary payday loans.

Consumers should worry about the tribal loans because they are more exposed to risk due to unregulated tribal loans.

What to know about tribal loans

Here are some aspects you should understand before you start applying for tribal loans.

1. They charge very high interest rates

Since the CFPB does not regulate them, tribal loan lenders misuse their borrowers by charging them very high interest rates. For example, the lenders charge $15 for every $100, which is way too expensive compared to payday loans which charge $10 for every $100.

The APR of tribal loans ranges from 440% up to 950% compared to ordinary payday loans with an average APR of 399%.

2. Tribal loans are short-termed

Just like payday loans, tribal loans are also short-termed. However, borrowers can pay tribal loans in smaller installments that do not go beyond one year. However, all that matters is how far you want to stretch the loan. The earlier you pay, the smaller the interest, and the longer you dwell on the repayment process, the higher the interest rates.

3.  Tribal lenders have exempted themselves from the federal regulations

Some tribal loan lenders have said that the payday loan rules do not apply to them and should be part of CFPB regulations. Payday loans are not in some countries because CFPB has ruled out that they are costly and usually a debt trap.

With the high interest rates associated with payday loans, it’s easy to keep rotating on the same table, unable to clear the loan entirely.

However, tribal loan lenders have exempted themselves from payday loans. They said that they are community-owned lenders, and the rules should not apply to them.

That’s why borrowers should be keen before they can dip their feet in the tribal loans. But, unfortunately, there is no regulatory body that will save you from the claws of these tribal lenders.

4. There is an online application

Individuals with bad credit can also apply for tribal loans. The application process is straightforward. The lenders can take up to 24 hours or less to approve your loan. However, you can get the money in your account on the next business day in some instances.

5. Deals with small amounts of money

If you are looking for a huge amount of money to buy a house or a car, then tribal loans are not a good choice for you. Furthermore, the interest rates are too high, so the higher the amount, the higher and the interest. And, probably, you don’t want to get stuck on payments along the way.

The lenders have a complete obligation to decide how much to give you for those with bad credit. The loan limits range from $100 to $1,000.

Tribals loans can only sort out your small emergency requirements that do not require a large amount of cash. For example, if you need to fund your wedding or buy groceries, you may consider getting a tribal loan.


It’s always advisable to take only small loans that you can comfortably repay in the designated time. If you need to struggle with a bad credit history, remember that repaying your loans on time can help you with that. And that’s why you should think again before you can step into a tribal loan due to its high-interest rates.

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