In the United States, the average long-term savings rate is less than 9% [11. If that’s the case, saving $5,000 from $40,000 in after-tax earnings will take a year and a half. Unsurprisingly, many Americans rely on debt to cover their bills when they cannot save for an emergency. It’s not a good idea to take out a loan from every lender. You must conduct due diligence before agreeing to do business with them. With the advent of the internet, which has almost destroyed privacy, nearly every lender you’ll come across has information available. This isn’t the case with FirstLoan. Here is a first loan review that will tell you all you need to know about whether they are deserving of your business.
What is a First Loan, exactly?
First Lending is a short-term installment loan firm that operates online. They accept that they are an “expensive form of borrowing” that should only be used to cover emergency expenses. People may, for example, be required to pay for emergency medical expenditures, house repairs, medical crises, or even rent. This is strikingly similar to the justifications used by payday lenders.
Because the similarity might be harmful to businesses, First Loan addresses the parallels. First Loan says their personal loans are superior because they “provide more flexible repayment options while still providing cash whenever needed.”
There isn’t much of a difference between the two types of personal loans regarding practical use. They’re both due soon, but they share practically everything else. They’re both rather costly, but they’re accessible in a small amount of principal and are meant to help in emergencies. Even for people who may not be able to repay the loan, they are both straightforward to obtain.
Is First Loan a licensed company?
Because First Loan has a California postal address, it must register with the Department of Business Oversight. They don’t have any state licenses, but that’s because they’re referred to as tribal loans.
As a result, they are an extension of a Native American tribe, operating (ostensibly) from their land and adhering solely to their tribal laws. They are exempt from following the laws enacted by the states and the federal government due to “tribal immunity.” As a result, they frequently offer interest rates far higher than those set by state laws. In California, for example, the maximum annual interest rate is 460 percent, but First Loan’s rate sample on their website is 778 percent.
First Loan, like many other tribal lenders, makes its tribal status clear in its fine print. According to their website: “The Elem Indian Colony of Pomo Indians, as a sovereign Tribal nation within the United States, operates First Loan, a Native American-owned business. All applicable federal laws and regulations, as well as tribal law established by the Elem Indian Colony of Pomo Indians, are followed by First Loan.”
This implies that they are tolerant of government restrictions, but they refer to a federal statute that states that Native American tribes have control over their lands. State governments have complete control over payday lenders. Thus federal legislation has no impact.
The most often used loan phrases.
First Lending’s loan terms are comparable to payday or tribal installment lenders. They may be marketed as “a terrific alternative to cash-out payday loans,” but they’re not much of an upgrade (if at all). What can you expect from their offerings:
- Customers with principal amounts 0 to $5,500 ($1,500 limit for first-time purchasers)
- An annual percentage rate (APR) of 600 to 795 percent.
- Payment plans are offered on a weekly, bimonthly, and semi-monthly basis.
- A one-year complete payback plan is available (no specifics, however, the loan sample appears to be 26 bi-weekly installments)
- There are no prepayment penalties for paying off your loan obligations early.
- There is a $25 cost for insufficient money, plus an extra $25 fee for each day that the payment is late for more than four days.
- Additional fees are outlined in the loan agreement.
First Loan presents an example of a typical loan accessible on their website, which demonstrates how ludicrous these terms are. Payments of $149.75 will be made on a 0 loan with a 778 percent interest rate and a payback plan of 26 bi-weekly installments. Only $0.17 of the first installment will be applied to the principal. The total loan amount that will be borrowed is $3,387.82. This is more than seven times the initial principle owing!
Online Reputation Management
First Loan has been in business for at least a couple of years, and they’ve had plenty of opportunities to establish a respectable track record. When researching a lender, it’s usually a good idea to acquire a second or third opinion, and a third and fourth opinion isn’t terrible either. We’ve created a summary of the most critical aspects of the First Loan evaluation.
The Better Business Bureau (BBB)
Let’s start with the Better Business Bureau (BBB). They’re among the best sites for determining a company’s quality since they operate slightly differently from other review sites that rely on crowdsourced feedback. They serve as a link between the company and its consumers. Both sides can assess the consumer experience by sharing and receiving messages. This refers to their punctuality, efficiency, and quickness.
The Very First, The BBB rating on loan is C+. This isn’t the worst possible score, but it’s also not great. The firm has barely been around for a short period, yet its BBB page has the equivalent of 57 complaints. They have responded promptly to all of them, so they do not receive an F.
On the website, all of the customer reviews are negative. There are just eight reviews on the site, but they all give the lowest possible rating (1 out of five stars). The bulk of critiques focuses on the company’s exorbitant borrowing prices, although that isn’t its sole flaw. The fact that most complaints are about collections and billing concerns is even more concerning.
Sites with User-Generated Reviews
The crowd’s more common evaluations repeat the issues found on the BBB profile. For example, First Loan’s Trustpilot profile has 1.4 five-star ratings based on many reviews (88).
Compared to the BBB website, First Loan has done far less to manage its Trustpilot profile. They haven’t claimed their listing, responded to any concerns or even explicitly encouraged anybody to submit a review. It’s a good thing because organic reviews are more accurate.
Every other review of First Loan says the same scenario. Three-quarters of the 43 Trust Mamma ratings give it a one-star rating. They’ve also managed to get on Scam Advisor’s radar and have a bad trust score.
While we don’t recommend borrowing money from First Loan or any other tribal lender, it’s not unusual for folks to fall into this trap. Some features make them intriguing, particularly to people who may not be qualified for standard loans.
They’ve done things like:
- A method for submitting applications that take only a few minutes for candidates to complete.
- Low qualifying standards make them available to folks who have had problems acquiring credit in the past.
- The capacity to fund loans as soon as the next business day
- The modest principal balance is ideal for covering minor costs.
At first glance, these loans may appear to be a godsend for people in need of a little additional income until their next payday. However, reading the tiny print reveals that they’re nothing more than a long-term payday loans with the same risks.
The risks associated with First Loan’s products are the same as those associated with similar tribal installment loans. Taking out a loan with funds from First Loan, like their peers, is not a good choice. Even individuals with sufficient means to repay their loan before the due date (two weeks later) will learn that they have engaged in a payday loan transaction.
The following are the critical concerns with First Loan:
- Their APRs are substantially higher than almost any other type of credit (except for payday loans).
- Borrowers are likely to have difficulty completing their payments, resulting in additional fees and exacerbating the problem.
- Borrowers can’t sue First Loan like they can a traditional lender if it does anything illegal.
Tribal financing is dangerous in general, and First Loan is no exception. Their loan amounts are higher than their competitors, making them riskier. The financing cost for 000 loans at the highest rate of 795 percent will result in a total interest payment of $30k for a year.
What is the procedure for applying for a First loan?
Applying for an installment loan does not take long because they have fewer qualifying standards than traditional lenders. Prospective borrowers must fulfill the following criteria to be eligible for funding through First Loan:
- Employer verification or a reliable source of income
- Maintain a good-standing bank account.
- Check to see whether you have a working email address and phone number.
- You must be at least 21 years old.
- Are you in a state where First Loan may help you?
Anyone who meets these basic minimal standards has a reasonable probability of being approved when they apply for a personal loan. The procedure will be completed in a short amount of time. Keep in mind that one of their numerous benefits is their application procedure.
All you have to do now is provide the following information:
- About yourself: Details about your living situation, as well as evidence of identification and contact information
- Information about earnings (or other sources of money) and earnings levels in the workplace.
- Your bank account so that First Loan may transfer funds and debit your account to make payments. Banking information.
While the application procedure is simple, giving your personal information to anybody is not a brilliant idea. Even if First Loan does not misuse their information, it may be in the hands of someone who does. Don’t just throw this stuff out there.
Alternatives to a First-Time Borrower’s Loan
Aside from a cash shortage, one of the most common reasons consumers turn to a lender like First Loan is because they can’t afford their credit ratings. Many applicants feel they will not obtain a loan from a bank. They assume that the only choice is to pay exorbitant fees for service.
This does not have to be the case. Tribal and payday lenders claim that the rates they demand are necessary to make money, yet, considering the risk, they assume. Many lenders lend to high-risk consumers and provide APRs substantially lower than those charged by First Loan. Here are some of our favorites:
- Credit unions are one of the best solutions for people who don’t have excellent credit. To be eligible for a loan, you must be a member. Even for people with bad credit, their prices are frequently lower than those offered by other lenders.
- Private lenders with secured credit: Lenders are hesitant to give loans to those who have demonstrated a poor track record of repaying their debts. They don’t want to take the chance of losing money on their investment. They may, however, be ready to lend to persons with bad credit who can acquire collateral, such as their home or automobile. To avoid losing your home, make sure you pay off your secured debts on time.
- Cash Advance Request Forms. Cash advance applications are an excellent option for folks who just need a small amount of money until payday. Earning cash, for example, allows workers to receive payment for their work as soon as they finish it instead of waiting for a salary. Furthermore, there are no necessary expenses or fines while paying back the money.
Other than the First Loan, these solutions will be more acceptable for individuals who want cash. You can utilize one of them before turning to a tribal lender.
Recommendations at the End
If you’re looking for a simple First Loan review that explains everything you need to know about borrowing money from the company. The answer is a resounding no (though this shouldn’t come as a surprise). For the vast majority of borrowers, First Loan is too costly. They’ll just exacerbate the situation. If you need assistance with your costs, consider one of the above ideas.
Prior to final approval and financing of the loan, one of our customer service experts will assist you in completing the loan procedure, which will involve verification of certain personal details.
Try to figure out how to solve your problems without borrowing money in the first place. If you can reduce your expenses or generate a little more money from time to time, you may be able to avoid needing to borrow again. A credit specialist might be a useful (and reasonable) option if you need assistance with your credit score. For immediate assistance, contact one of the local counselors.
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I am David, economist, originally from Britain, and studied in Germany and Canada. I am now living in the United States. I have a house in Ontario, but I actually never go. I wrote some books about sovereign debt, and mortgage loans. I am currently retired and dedicate most of my time to fishing. There were many topics in personal finances that have currently changed and other that I have never published before. So now in Business Finance, I found the opportunity to do so. Please let me know in the comments section which are your thoughts. Thank you and have a happy reading.