Spotloan’s high interest rates are comparable to payday lenders’, so it’s best to borrow elsewhere.

Whatever Spotloan says to the contrary, it has a lot in common with payday lenders. It offers small loans between $300 and $800, and there’s no minimum credit score to apply. Interest rates are also 450 percent APR, which is high by any standard. You can get your money within a day of applying, however, and you can choose your loan term anywhere between three to eight months. If you’re struggling, you may even be able to temporarily pause your payments. There are no hidden fees and you won’t be charged for paying your loan back early either.

You should definitely explore other options before borrowing from Spotloan, however. Many personal loan providers, like OneMain and Avant, can get you the money you need at much lower interest rates, and with longer repayment terms. You should also check out what your local bank can offer you. If you can qualify, a personal loan from your local bank will almost certainly give you the lowest interest rate and best repayment terms.

The Specs

APR 450%
Loan Amounts $300 to $800
Loan Terms Three to eight months
Payment Schedule Biweekly
Best For No one. You can find more affordable rates elsewhere.
Not For People looking for reasonable interest rates
Better Business Bureau Rating B-
In Business Since 2012
Standout Features No minimum credit score
No hidden or prepayment fees
Get money the next day
Option to pause payments

The Claim

Spotloan portrays itself as a payday loan alternative, providing the same quick cash, but with more manageable repayment terms. It promises a savings of up to 50 percent compared to traditional payday lenders.

Is it True?

No. Though Spotloan’s website vilifies payday lenders and underscores its differences, when you look past the fancy marketing language, the similarities are hard to ignore. Both offer small, short-term loans with astronomical interest rates that leave customers struggling to pay back the borrowed funds. The company readily acknowledges the high cost of doing business with them, stating that “[Spotloans] are still an expensive form of credit” and encouraging prospective borrowers to check with family, friends, banks, and credit cards before committing to Spotloan.

It offers loans between $300 and $800 at 450% APR. That is over 12 times more expensive than the highest rate most personal loan providers charge. That adds up quickly, even on a small loan. In most cases, you’ll end up paying back more than twice what you borrowed. If you can’t keep up with the payments, you’ll incur late fees too, which will drive the cost of your loan up even more. The company doesn’t charge hidden or prepayment fees, so you won’t be penalized if you pay your loan off early, but this may not be an option for everyone.

The main difference between Spotloan and a typical payday lender is that Spotloan gives you more time to pay the money back. You get to choose your loan term, between three and eight months, whereas most payday lenders want their money back within a couple of weeks. The longer repayment period may be more manageable for some borrowers, but it also means you’re being charged a lot more in interest over the life of the loan.

You can find a better lender than Spotloan, even if you have bad credit. There are plenty of personal loan providers that can offer you the money you need without drowning you in interest. Companies like OneMain Financial have few application requirements and their maximum APR is only 35.99%. They also offer much larger loans, so they’re a better fit if you need to borrow more than a few hundred dollars.

Our Deep Dive

  • Not available in all states: Spotloan offers installment loans in 38 states. Residents of Arkansas, Colorado, Connecticut, Massachusetts, Minnesota, New Hampshire, New York, North Carolina, North Dakota, Pennsylvania, Vermont and West Virginia are not eligible.
  • Astronomical interest rate: When you borrow money from Spotloan, you’ll be charged 450% APR. That is on par with most payday lenders, and far more expensive than the 5% to 36% interest rates most personal loan providers charge.
  • Borrow up to $800: Spotloan offers loans between $300 and $800 in $100 increments. If you’re looking to borrow more than this, you’ll have to explore other options.
  • Few requirements to apply: As long as you are 18 or older, have a source of income, and a valid email, phone number, and bank account, you can apply for a Spotloan.
  • Soft credit pull: Spotloan will do a soft credit pull when you apply. This will not impact your credit score.
  • Choose your repayment terms: Unlike payday lenders, Spotloan enables you to choose how long you need to pay back your loan. You can choose anywhere between three and eight months.
  • No prepayment fee: If you choose to pay your loan off early, you won’t be charged extra to make up for lost interest.
  • Get money the next day: Once you’ve applied for a Spotloan, a representative will call you to verify your information and then your funds will be deposited in your account – usually the next day.
  • Auto-payment option: You can set up auto-payments, so what you owe is deducted from your bank account each pay period. This is a nice option to have if you tend to forget when payments are due.
  • Pause your payments: If for some reason you’re unable to make a payment, you may be able to pause your payments, as long as your account is in good standing.

Cost Rundown

Spotloan’s 450% interest rate is on par with payday lenders’, and significantly more expensive than most personal loans. It may seem like an easy solution to a short-term money shortage, but the excessive interest could create long-term problems if you’re unable to keep up with your payments. Even if you can make your payments, the amount you’ll end up paying certainly calls into question the value of this type of loan.

For example, say you needed to borrow $800 and you choose an eight-month term. Over the lifetime of the loan, you’ll end up paying $2,516, the majority of which — $1,716 — is interest. In the end, that loan costs over three times what you borrowed.

Cheaper (or Free!) Alternatives

There are plenty of cheaper ways to get the money you need. Family and friends are a good place to start because you can often borrow relatively small amounts of money from them without being charged interest. If that’s not an option, check with your local bank or use a credit card. Each will offer significantly lower interest rates, especially if you can pay the loan off in a timely fashion. Keep in mind, though, that a lot of credit card debt could have a negative impact on your credit score.

A personal loan from lenders like OneMain or Prosper is another viable option. Many of these companies have more lenient application requirements, so you may be able to get a loan through them even if you’re denied by a bank. Interest rates generally max out at 36% and you can extend the terms of your loan out to five years if you need to. Personal loan providers also enable you to borrow more money — up to $40,000 in some cases — so they’re a good place to turn to when you need to borrow more than just a few hundred dollars.

The Competition

OneMain: A well-known personal loan provider, OneMain offers loans up to $30,000. Interest rates vary from 16.05% – 35.99%, depending on your creditworthiness, but there is no minimum credit score required to apply.

Avant: Another personal loan platform is Avant. Through Avant, you could borrow from $2,000 to $35,000* with rates ranging from 9.95 to 35.99 percent, depending on your credit history, income, and other factors. There’s also an origination fee of 4.75** percent.

*The actual loan amount, term, and APR amount of loan that a customer qualifies for may vary based on credit determination and state law. Minimum loan amounts vary by state.
**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.

Avant branded credit products are issued by WebBank, member FDIC.

Prosper: As a peer-to-peer lender, Prosper offers loans up to $35,000 that are funded by regular investors. It offers the lowest interest rates of any company on this list, starting at just 5.99 percent. Those with lower credit scores could end up paying as much as 36 percent, though. Prosper requires its borrowers to have a minimum credit score of 640, however, so it may be out of reach to some.

What Others Are Saying

  • Financial Times discussed new legislation that could impact payday lenders and companies like Spotloan. It specifically called out Spotloan as trying to “skirt state laws by setting up on tribal reservations and claiming sovereign immunity.” Spotloan is owned by the Turtle Mountain Band of Chippewa Indians in North Dakota.

The Bottom Line

Spotloan’s high interest rates should make it a last resort for borrowers. Check with family and friends, your local bank, and other personal loan providers like OneMain, Avant, or Prosper first.