Each of us is familiar with tribal loans. This type of loan has gained immense popularity among the middle-income population. Also, the financial market is filled with a large number of organizations that specialize in the issuance of tribal loans. This situation is easily explained by the fact that these companies have a very significant percentage for the services provided. So how can one choose from a variety of proposals that will allow you to borrow money safely and to protect yourself from the debt hole?
What are Tribal Loans
The history of tribal loan development goes far into the past, where the main purpose was to provide timely credit to the poor. It was believed that if a poor person was provided with financial support, then they can be encouraged to create own business, which would lead to the creation of new jobs and help eradicate poverty.
To date, many microcredit organizations do not pursue such a global goal. The amount of money provided is given to the borrower at a high-interest rate. Thus, talking about tribal payday loans, they foresee the provision of small amounts of money at a certain percentage for a short period.
Before signing a loan agreement, each borrower must know and understand that this type of product has both positive and negative sides. There is no doubt that this type of product is especially beneficial for young entrepreneurs who can return funds in a fairly short time.
Besides that, the advantages of tribal loans include the following:
- No paperwork. Only a password is required.
- No income statement required.
- No need to provide a guarantor.
- Indifferent attitude to the credit history of the client.
- Deciding on the possibility of a microloan at the first application takes a little more than half an hour. If the client subsequently calls for the service again, the decision is made already in a shorter time.
- There is no need to provide a security deposit. Money is issued without any security. However, if the borrower needs a larger amount, then the organization may require a certain type of collateral.
- The organization that issues such a loan does not control for what purpose the money is received and where it is spent.
The minuses of tribal loans include the following:
- The main disadvantage of this product is its excessively high-interest rates.
- Many clients are dependent on this type of borrowed funds.
Conclusion
Each microcredit organization issues funds following its conditions. The age of the client is not ignored. For example, some do not give money to pensioners, while others, on the contrary, treat them more loyally. Therefore, before filling out the questionnaire, it is necessary to ask as many questions as possible to eliminate unpleasant moments in the future.
Undoubtedly, a tribal loan can serve as a powerful impetus for the development and establishment of financial well-being. However, to achieve this goal, the borrower will need to put a lot of effort. Otherwise, thoughtless actions can lead to significant debt.
