Spotloan is a short-term installment loan company that is designed from the ground up to provide a better solution to immediate financial needs than payday loans. According to the "About Us" page of the company's site, Americans spend more than 7.4 billion dollars each year on payday loans with an average loan size of $400. If you break that down farther, that's 18,500,000 loans per year.
The Consumer Financial Protection Bureau lists the average payday loan fee as $15 per $100 borrowed. At $60 per $400 loan, that's nearly $1,110,000,000 in penalties each year. It's no wonder the payday loan industry is so massive—and is still growing.
The History of Spotloan
Spotloan is a brand owned by BlueChip Financial, which is a tribal entity owned, governed, and organized by the Turtle Mountain Band of Chippewa Indians. The tribe is recognized by the federal government and operates out of their reservation in North Dakota.
The founders recognized the lack of reliable lending options for short-term loans, as well as the danger associated with payday loans, and formed Spotloan as a result. The company fills a gap in the market by providing installment loans over a longer period of up to eight months. Spotloan also provides elements that other lending companies do not, including:
- Savings of up to 50% of what typical payday loans provide
- Relationship managers to help you along every step of the borrowing process
- No prepayment penalties
- The ability to pause your payments
Spotloan lends via BlueChip Financial and other affiliated brands of the Turtle Mountain Band. The company abides by all applicable tribal and federal lending laws, provided they do not interfere with the sovereignty of the tribe. These laws include the Federal Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Electronic Funds Transfer Act, the Gramm-Leach-Bliley Act, and any relevant regulations.
How does Spotloan work?
Spotloan is designed to be as easy as possible. If approved for a loan, you can expect the funds to be deposited into your account the next business day under normal conditions. To get started, you need to apply for a loan—a more indepth explanation of how to do this can be found below.
What are the services offered by Spotloan?
The primary service offered by Spotloan is an online installment loan. The company is very clear that this is not a payday loan; rather than having only two to four weeks to pay the loan back, you have up to eight months to pay back the loan. Why is an online installment loan a better option?
Because the funds can be received as early as the next day, these loans can be used for emergencies. Imagine if you encounter unexpected car repairs or need a tow and don't have the funds to repay the tow service. Maybe your pet is ill or your cell phone was broken. Situations like this can cause significant grief, but an installment loan can provide you with the funds you need to solve the problem as quickly as possible.
Rates and terms of the services offered by Spotloan
The maximum possible interest rate for a Spotloan loan is 490%. However, there are other terms you agree to when you sign up for an installment loan from Spotloan. The first is that you give the company permission to gather and verify your data, and that this data might be shared with "employees, affiliates, vendors, partners and third parties as required to offer you a loan."
Spotloan may also gather information relating to your bank account, your credit score, and your contact information. You also authorize Spotloan to contact you at all specified phone numbers during reasonable hours with either a prerecorded message or a live representative.
How do I use Spotloan's services?
Spotloan is easy to use. If you need to borrow a set amount of money in a short time, apply for a loan and you can expect to see the funds deposited the next business day. After that, you repay the amount within the given time period. Here's how to apply.
First, select the amount you want to borrow and a payment plan that fits into your budget. This payment plan includes the amount of time you need to pay back your loan, as well as the amount you want to pay each month. The payment amount you choose is what determines the amount of time you have to pay back the loan.
Next, fill out the online application. The application asks the following information:
- First and last name
- Social security number
- Email address
- Phone number
- How long you've been at your current residence
- Whether you rent, own your home, or live with parents
- Your monthly rent/mortgage
- Whether you've ever been evicted
Once you've answered the questions on the application, submit the form. You'll know within seconds if you've been approved or not. If your loan is approved and confirmed before 8 PM Eastern Time, the funds should appear in your account by tomorrow.
Am I eligible for the services provided?
The eligibility requirements for Spotloan are not nearly as stringent as many other installment loan companies. You'll need a job or some other regular source of income that you can prove, a checking or savings account, a valid email address or phone number, and you must be at least 18 years old.
These loans are available in all states except Arkansas, Minnesota, New York, North Dakota, Pennsylvania, West Virginia, and the District of Columbia.
How user friendly is Spotloan and its services to use?
Spotloan is set up so that the application process is simple and transparent. There are no confusing terms to remember, and the form can be viewed easily on almost any browser. After the signup process, you'll receive a phone call from a designated relationship manager to help you complete the process.
How is the customer service?
The Spotloan customer service attempts to go above and beyond. Each applicant is given a dedicated "Relationship Manager" to keep them up to date with the progress of their application, as well as to answer any questions that may arise during the process.
Spotloan lists only three ways to get in contact: via phone, traditional mail, or email. The website does not list their hours of operation, and the email address is a black-hole firstname.lastname@example.org address. While we appreciate what the company does with its relationship managers, making the contact information more readily available and listing out the necessary information would win Spotloan even more points.
Is Spotloan safe and legit to use?
- Spotloan can share your personal information for everyday business purposes and you cannot restrict this sharing.
- Spotloan can share your personal information for their marketing purposes and you cannot restrict this sharing.
- Spotloan can share your personal information for joint marketing with other financial companies and you cannot restrict this sharing.
- Spotloan does not share your personal information for their affiliates' everyday business purposes.
- Spotloan does not share your personal information for their affiliates to market to you.
- Spotloan can share your personal information for nonaffiliates to market to you, but you can restrict this sharing.
That said, the company does take steps to protect your personal information, including the use of "security measures that comply with federal law. These measures include computer safeguards and secured files and buildings." Despite these assurances, we would prefer that Spotloan be more specific about the types of safeguards it employs both online and at the physical location the information is stored.
To the company's credit, the site uses HTTPS rather than the standard HTTP, resulting in an additional layer of encryption—particularly when personal information is being submitted.
Now to answer the question of legitimacy, we'll start with the Better Business Bureau. Though Spotloan is not accredited by the BBB, it holds a B- rating and a customer composite score of 3 out of 5 stars. Of 22 total customer reviews, eight were positive and 14 were negative. There have also been 107 total customer complaints made.
Many of the complaints revolve around the interest rates and repayment process. While it is possible to repay the loan early, it can be extremely difficult to do so. While the company is designed to help fill the gap that payday loans create, it is still a lending company and will use whatever means necessary to receive repayment. The company is based out of Native American land, which means it does not necessarily have to follow the laws of your state of residence; read the contract and fine print carefully before agreeing to a loan.
Is the company legitimate? Absolutely. You will receive the money if you qualify for a loan. However, if you fail to repay the loan on time or don't bother to read the fine print, you may find yourself repaying the loan amount two or three times over.
Spotloan excels in several areas that set it apart from the competition, including:
- According to Consumer Affairs, Spotloan scores 4/5 rating in overall customer satisfaction.
- Spotloan is transparent about their rates and policies.
- Spotloan has easy repayment options.
- Spotloan has a quick turnaround time with no upfront fees.
Before applying for a loan through Spotloan, there are several weaknesses you should be aware of.
- Spotloan offers may not always be the most competitive.
- You must wait for Spotloan to contact you before you can complete your application.
- Spotloan's APRs are competitive but still painfully high.
Does Spotloan run my credit score? Or affect my credit score?
Yes, Spotloan will check your credit score. While a single check isn't likely to affect your credit score, too many checks within a limited window of time may cause you to appear as higher risk and lower your overall credit score.
How is a Spotloan different from a loan commitment?
Spotloan is no different than a loan commitment. Although it is an installment loan that can be paid off in smaller increments over an extended period of time, Spotloan is still a lending agency, and any funds you receive are considered a loan. While these may be a better alternative to payday loans, it is still best if you can avoid missing a payment and take steps to ensure that all repayments are made on time.
Does Spotloan report to the three credit bureaus? If so, which ones?
Spotloan does not report on-time payments to the credit bureaus, nor does it report applications. However, if you default on a loan, your credit score will be affected. The extent to which this affects your credit score will depend on a number of different factors, but defaulting on a loan should be avoided at all costs.
Does not paying on time affect my credit score?
Not at first. Late payments may be met with additional fees, more interest over the course of your loan, and a $10 fee if you autopay with insufficient funds. If you can't make a payment within 90 days of your scheduled payment date, you'll default on the loan and face more severe effects on your credit score. Missing a payment here or there won't affect your score, but defaulting will.
Borrowing From Spotloan -- Our Verdict
While we will always argue against a payday or short term loan, we understand that emergencies arise and sometimes emergency funds are needed. If that is the case, then Spotloan is a far better option than a shady payday loan company; their transparency in both terms of service and rates make Spotloan more trustworthy than many brick and mortar shops. However, the APR is still high, and failure to repay loans on time can place you in deeper financial straights than before.
If you have money coming in soon and you will be able to repay your loan in full, then Spotloan is a great option. However, if you're unsure of your ability to pay, only rely on Spotloan as a last resort. It is far better to dip into your savings or to borrow money from a trusted friend than to potentially place yourself at the mercy of high APR rates.