Many of the original Native American lenders have gone out of business, and one of those early lenders was Rapid Arrow Direct Lending. It's almost like we are on an entire second generation of tribal loan companies, there just seems to be very few of the companies left that were active in the 2020 to 2025 range of time. Rapid Arrow Direct Lending was very active in 2020 and we know this because of the volume of online complaints that are still published at a number of different sites. Evidently, Rapid Arrow Direct Lending was not that good at creating a good time with their customers.
The complaints against Rapid Arrow Direct Lending are familiar to anyone who knows about tribal payday lenders. The goal of most payday lenders, at least the majority of the time, is to get someone (new customer) to take out a nominal loan, somewhere between $300 to $500 usually. Then the customer is supposed to repay this loan in its entirety on the customer's next payday, thus the name payday loans. But many times (maybe more than 50% of the time) the borrower has trouble coming up with the money to repay. Remember, not only does the borrower have to repay the full amount of the principal but also the finance charge, which averages around 30% of the original loan amount.
So a good example would be if a borrower had to repay a $500 loan on their next payday. That day they would owe the $500 they borrowed plus another $150 because the lender charged 30% interest on every $100 that was loaned to the customer. This is where the problem (and my own personal problem) with payday lending shows itself to be a faulty financial product. Many people will have other obligations they have to meet before they can repay this loan (that they just took out only 13 or 14 days ago) so there are only two options, which are either to default on the loan or to get an extension of the loan by just paying the finance charge of $150 and rolling the loan over.
Defaulting on the loan is a bad idea, unless the customer is completely done financially. The creditor will start badgering the customer, they will send email and snail mail, they will start calling the customer day and night to lecture them that they need to pay back the money. Then they might hire a collection agent who will step all these measures into overdrive. They might even threaten you with legal action, although this is most likely a false threat as they have no real power in a court. But either way, no one wants to be put to collections and have their lives disrupted by collection agents. So the other option is to pay the finance charge and keep the loan going down the road.
The problem is that's just where the loan will go, it will get kicked to the next payday and the next pay cycle, and on we go. The problem isn't just the payday lenders fault, because the customers are supposed to read the terms and conditions of the loan they take out. But the truth is that many customers are just desperate, they take out the loan because they need the cash in their hands now, and they just worry about paying the loan off later. The difficulty begins rather quickly though, because the idea of "later" arrives much more quickly with a payday loan rather than a traditional loan.
When a customer keeps taking out an extension on a payday loan, the lender just keeps making more money. The profits add up fast because often the original loan amount was for a paltry $300. If a customer keeps paying $90 every 14 days (30% interest calculated and charged on each payday the customer has the loan outstanding) then the lender will have doubled their investment after only seven customer paydays, or equivalent of around 90 calendar days. Not a bad business model, is it? Well if you have low morality and a low soul index reading, that is.
This is what happened to Rapid Arrow Direct Lending, a number of customers got into trouble by rolling over what were intended to be short-term loans. Although it is technically not the fault of Rapid Arrow Direct Lending the fact is that people start to complain about this type of business even if the company is legally operating within the proper bounds of the law. In other words people just don't care about lawful or unlawful, they just smell a rat. Everyone has a good idea of what is right and wrong, and people started to say that Rapid Arrow Direct Lending was not giving them a good time at all, but instead were spreading misery.
How do we know this if the company is out of business? Rapid Arrow Direct Lending might be gone, but the complaints against them are still littered throughout the internet at dozens of websites. Complaints, negative reviews, angry forum posts, ex-customers warning anybody who happened to read a blog post, you name it and people were against this company.
Below is an average complaint by a customer who had borrowed only $200 from Rapid Arrow Direct Lending....
"As of today, they have deducted $385.00 from my account and the web site says that I still owe $80.00."
So we know that Rapid Arrow Direct Lending risked $200 of their own money with this customer. In a very short order, less than six months to be sure (probably much shorter amount of time) the company had already made a minimum of $265 booked as profits that had been paid to them by the customer.
In addition, they were saying the customer still had an outstanding balance of $80 which had to be repaid, and there were certainly some more finance charges on that $80. Rapid Arrow Direct Lending made at least $300 in profits off this customer, and maybe more.
The main problem I have with this now defunct company, and all of the current tribal lenders that are still in business, is that what they are offering doesn't actually seem to be a loan. A loan as I understood it growing up, meant that someone loans somebody else some money for a period of time. Loaning someone money for 12 or 13 days isn't a very long time, in fact it's hardly any time at all. This is why I believe that long-term the future for payday lenders, including the Native American payday loan companies, is going to be bleak. At least an installment loan can be arranged for six month or 12 months, some reasonable amount of time to loan the money. Payday lenders just do not provide much of a service to justify their existence.
Rapid Arrow Direct Lending made some money while they were around, who knows why they quit. It wouldn't surprise me if the bad reputation and multiple complaints against the company wound-up being part of their demise. However they closed, Rapid Arrow Direct Lending is now gone and you can bet they left behind anything but good times in their financial wake.
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