There’s no shortage of loan providers marketing to people who need a little bit of cash as soon as possible. They all offer the idea that better days are ahead. Unfortunately, most of them know that their target customers are in tight spots and use that leverage to charge some pretty outrageous prices. Before working with any of them, you need to know exactly what you’re getting into. If you’re currently in need of a small loan and considering Better Day Loans, read this first.
What is Better Day Loans?
Better Day Loans is a tribal “payday loan alternative” provider. They offer short-term, high-interest loans to “help you get the cash you need quickly and without any hassles.”
Unlike traditional payday loans, their products are actually installment loans. The borrower gets the lump sum upfront, then pays back the principal and interest over time. Most payday lenders require their borrowers to pay the full balance within just a couple of weeks, at their next payday.
They’re a solely online lender, so they don’t have a physical location anywhere. The only way to apply is on their website, where approval only takes a few seconds. When an application goes through, they’ll transfer the funds as soon as the next business day.
Is Better Day Loans Licensed?
Better Day Loans doesn’t have a license to lend from the California or federal governments, but they don’t need one. They’re a tribal lender, which means that they’re a Native American-owned business. Specifically, the Kashia Band of Pomo Indians of the Stewarts Point Rancheria takes credit for running the company.
Because the U.S. government recognizes them as a sovereign nation, they don’t have to obey the rules that usually govern payday lenders. They can charge higher interest rates, ignore licensing requirements, and give out loans much larger than the California state limit for payday loans ($300).
Typical Loan Terms
Because Better Day Loans is a tribal lender, their products are noticeably more expensive than even other payday lenders. They’re based in Santa Rosa, Calif., but don’t have to obey the laws that restrict California payday lenders due to their tribal immunity.
As they note in their disclaimer section: “This is an expensive form of borrowing. Better Day Loans installment loans are designed to assist you in meeting your short-term borrowing needs and are not intended to be a long-term financial solution.”
Here’s a summary of what you can expect when borrowing from Better Day Loans:
- The minimum principal balance is $200
- The maximum principal balance is $1,500 for new borrowers and $5,000 for returning borrowers
- The first payment must be on the borrower’s first payday after receiving their funds
- Subsequent payments are usually every 15 days
- Total repayment terms may be up to one year
- Borrowers can prepay at any time without penalty
- The average APR is 700% to 780%
Better Day Loans doesn’t provide their exact repayment terms on their website. They withhold that information until borrowers apply, so both the APR and length of the loan will vary.
It’s always a good practice to crowdsource opinions on a lender before entering into any contract with them. It helps weed out the sketchier characters. Turns out that, like most tribal and traditional payday lenders, Better Day Loans doesn’t have the greatest reputation online.
The best place to find quality reviews of any lender is with the Better Business Bureau. Taking a look at Better Day Loans’ profile reveals that most people have had negative experiences with the lender.
They are not BBB accredited, and there are consistent reports of:
- Poor communication and lack of customer support
- Excessive interest rates and costs to borrow
- Deceptive or misleading practices
The BBB started tracking Better Day Loans in late 2019, there have been more than 40 official complaints and 75 customer reviews. The average rating for these reviews is one out of five stars.
The business seems to be relatively new, especially since the BBB opened its file at the end of 2019. That means that there aren’t many other mentions of them elsewhere online. Trustpilot has just one middle-of-the-road review.
Pros of a Loan from Better Day Loans
People usually don’t turn to payday lenders unless they have a desperate need for some fast cash. Though we definitely don’t recommend working with Better Day Loans, they do have some advantages to offer those people, theoretically.
Better Day Loans can offer:
- A quick and easy online application
- Accessible loans, even with bad credit
- Funding in as little as a single business day
- Discounts for repaying via direct debits
- The ability to prepay at any time without penalty
Unfortunately, these pale in comparison with the problems they present.
Cons of a Loan from Better Day Loans
The cons of working with Better Day loans shouldn’t be surprising to anyone at this point. They come with many of the same downsides as both traditional and other tribal payday lenders, such as:
- Excessively high interest rates
- Extra fees for late payments, insufficient funds, and returned item fees
- Lack of transparency regarding the cost of a loan until it’s too late
- Poor communication and lack of support for customers
They’re also not available in parts of the United States, but that might actually be a pro since it probably benefits the people who live there.
How to Apply for Better Day Loans
For those who would like to take out a loan with Better Day Loans despite the evidence suggesting it’s a bad idea, here’s what to do:
- Visit their website: Remember, they’re an online payday lender only, so there are no in-person applications. There should be an “Apply Now” link somewhere on their home page.
- Provide personal information: The first section of their application is where they’ll collect personal background data. That includes the borrower’s name, address, driver’s license information, and Social Security Number. Borrowers will also have to select their loan type at this point.
- Provide income information: In the second section of the application, they’ll collect details on the borrower’s income streams. That includes employment income, side hustles, Social Security, and any passive income sources.
- Provide banking information: Finally, they’ll want to take down the borrower’s banking information. Filling out this section is what allows them to make direct debits to the borrower’s bank account. It seems impossible to decline to provide this information, even for those who will later opt to pay with something other than a wire transfer.
Better Day Loans will verify all the information in the application using national databases like Clarity, Factor Trust, and Microbilt.
If they accept the application, one of their customer service representatives will help the borrower complete the loan before the funding goes through.
Better Alternatives to Better Day Loans
Payday loans in general and Better Day Loans, in particular, should only ever be a last resort. There are many better ways to find cash fast, even for those with bad credit scores.
People who don’t want to risk working with a potentially predatory lender like Better Day Loans should consider the following instead:
- Take out a Payday Alternative Loan (PALs): For people who want to stick to borrowing options, consider using a PAL instead of a payday or tribal lender. They fulfill many of the same needs and have many of the same traits, such as small principal balances and low application requirements. However, federal credit unions provide the loans, so their interest rates are much more affordable.
- Sell some unnecessary possessions: Most people looking for a payday loan only need to make a few hundred dollars. But it’s easier and less risky to sell a few personal belongings than it is to take out an expensive loan. With all of the various resale platforms — including Craigslist, eBay, Mercari, NextDoor and Facebook Marketplace — there are buyers for almost everything in your garage.
- Cash advance apps: Download a cash advance app (Earnin is a good one) right to your smartphone. It’s free. These apps allow customers to get an advance on their next paycheck. Users usually aren’t charged any interest or fees, instead they ask customers to leave a “tip” for the service.
- Tap into the gig economy: Even relatively affordable loans are risky, and selling belongings isn’t sustainable for repeated emergencies. People with more time and energy than money or stuff should look to earn more instead of taking out debt or selling something. The gig economy has options for every possible worker under the sun, even dog walking. Drive for Uber or Lyft, pick up some food delivery shifts for DoorDash or Uber Eats.
Tribal payday lenders are an easy and accessible way to cover an emergency expense, but they almost always create more problems than they’re worth. At best, they delay an emergency for a while. At worst, they trap borrowers in a cycle of debt that becomes increasingly difficult to escape.
The Bottom Line
For those who don’t need to know all the details and simply want a yes or no answer on whether Better Day Loans is a good option, we’d have to say no. It’s often tempting to go with a fast and easy loan provider, but they’re not the ones to use.
Better Day Loans is simply too expensive. A borrower who takes out a $500 loan with them would end up paying over $3,400 in fees and interest over the life of the loan under their standard plan. That’s an APR of 780%, which is almost twice that of the legal limit for non-tribal payday lenders in California.
Even if you have bad credit and desperately need a loan, take your business somewhere else if it’s at all possible.