Payday lending has been a problem in this country for decades, almost since its very beginning. Since each state has the right to regulate the industry within its borders, it’s nearly impossible for the country to come to a consensus on the best plan of action. The lenders haven’t waited for legislators to decide their fates, either. They’ve evolved and found new ways to skirt state regulations. If you’re considering borrowing from Silver Cloud Financial, a tribal lender hiding behind the guise of sovereign immunity, this Silver Cloud Financial review will tell you everything you need to know.
What is Silver Cloud Financial?
Silver Cloud Financial is an online lender that provides short-term installment loans. They present themselves as a resource for people who need cash quickly to cover an expense that they wouldn’t be able to afford otherwise. To that end, they make sure that applicants can qualify for a loan and receive their funds in as little as a single business day.
That said, they aren’t suitable for most borrowers. It’s only in extreme circumstances that someone should even consider taking out a Silver Cloud Financial loan. They’re not intended for long-term financing but rather for short-term emergencies like car repair, medical care, or travel expenses for a job. Though this is hardly ever the case.
That’s because Silver Cloud Financial’s interest rates are significantly higher than the vast majority of lenders. They’ll lend money to just about anyone, but the cost of the loans is steep.
Is Silver Cloud Financial Licensed?
Silver Cloud Financial’s headquarters are in California, but they don’t have a license from the state. They do business from Habematolel Pomo of Upper Lake, a sovereign Native American nation within the United States.
They’re a tribal lender, which grants them “sovereign immunity” and makes it almost impossible to sue them successfully. Sovereign immunity allows them to operate under their own regulations and largely ignore those that states create.
Unsurprisingly, that usually works out poorly for the people who do business with them. State laws and regulations are often only in place to protect the consumer. Most significantly, Silver Cloud Financial can (and does) charge rates that are many times higher than legal state limits.
Silver Cloud Financial is surprisingly forthcoming about its tribal status. Most of their peers tuck away their atypical ownership in the footnotes or disclaimers, but Silver Cloud has an entire page dedicated to the topic. However, they don’t do anything to explain the significance of being a tribal lender to the consumer.
Typical Loan Terms
Silver Cloud Financial doesn’t like to reveal its loan terms publicly. Their website has never listed their interest rates, and their representatives decline to share that information over the phone.
Most of the details available on their loans are from former customers who have shared their experiences in various reviews across the internet.
Here are the terms that borrowers can expect from Silver Cloud FInancial:
- Principal balances between $300 to $1,500
- First-time borrowers can only receive up to $1,000
- Annual Percentage Rates (APRs) with an average of roughly 630%
- The option to prepay or pay off the entire balance with no penalty
- $20 nonsufficient funds fee (NSF)
Silver Cloud Financial doesn’t provide a sample loan, but at 630% (one rate reported by a customer), a $300 installment loan over a six-month repayment term would end up costing the borrower a whopping $945.65 in fees.
When considering a lender, it’s always a good idea to research the experiences of prior customers. Because Silver Cloud Financial is not forthcoming about its loan terms, this step is particularly crucial. Fortunately, the lender has been around for almost a decade, so there are plenty of Silver Cloud Financial review pages out there.
Silver Cloud Financial Review Tab
The most readily accessible reviews are visible on their website. Silver Cloud Financial dedicates an entire page to customer comments from Google and Trustpilot.
Trustpilot’s scores have an average score of 4.7 out of 5 stars, and those from Google average around 4.6. Both pages have over a thousand reviews, and they make a compelling case to work with the company.
Most of the positive reviews focus on the quality of their customer service. Silver Cloud Financial is better than most tribal lenders at explaining their rates, helping borrowers with problems, and responding to their questions.
Unfortunately, it’s hard to take these reviews at face value. Both Google and Trustpilot reviews are subject to manipulation, and it’s unusual for a tribal lender to have such overwhelmingly good scores.
Better Business Bureau
The sheer amount of reviews on Google and Trustpilot demonstrates how easy it is to create one on those crowdsourced review sites. There’s no guarantee that those are from legitimate customers, especially since they’re almost entirely from people whom Silver Cloud Financial directly invited to review them.
The Better Business Bureau (BBB), on the other hand, does a more thorough job of filtering out fake reviews. They’re a well-known establishment and review provider, but there are only 3 reviews and 39 complaints on Silver Cloud Financial’s BBB profile.
Their reviews and complaints paint Silver Cloud Financial in a very different light than those on Google and Trustpilot. The customers’ comments focus on the interest rates that make the loans so difficult to pay back.
They also mention other problems, like the company sometimes attempting to collect on loans that don’t exist from customers who have never heard of them.
Another great way to verify whether a company is safe to work with is by looking into any previous lawsuits against them. These are a huge red flag since they’re usually over some illegal practice that the business does consistently.
There was a significant lawsuit against Silver Cloud Financial as recently as 2017. The Consumer Financial Protection Bureau (CFPB) sued them — and three other online lenders — for collecting debts from consumers who didn’t actually owe them. They eventually dropped the suit, perhaps because they struggled to pierce the veil of sovereign immunity.
A couple of years later, borrowers also brought a class-action suit against the same four lenders for charging interest rates that exceeded state limits. Wisely, they’re taking the strategy of disputing that the lenders actually belong to the Native American tribes that they’re using to claim sovereign immunity. Time will tell if they’re able to break the connection.
Taking out a loan from Silver Cloud Financial is probably going to end up being a costly mistake for most people. With interest rates well into the triple digits, it’s unlikely that these are a good option for anyone, whatever financial crisis they’re going through.
That said, it’s not surprising that so many people end up borrowing from them anyway. They do a great job of providing everything else that someone would need in an emergency, such as:
- An application process that people can complete in a few minutes from their laptop
- Underwriting requirements that allow almost anyone to qualify
- Loans with principal balances as low as $300, which prevent people from having to overborrow
- The ability to transfer funds to a borrower’s bank account in as little as a day after submitting their application
It’s a shame that their interest rates are so unaffordable. If it weren’t for the unreasonable price tag, Silver Cloud Financial’s loans could be a valuable resource for lower-income people with bad credit.
While it’s understandable that people borrow from Silver Cloud Financial, it’s still a mistake. They pose all of the same dangers as every other tribal installment lender, and borrowers are taking a big risk by doing business with them.
These are the most significant reasons to stay away:
- The cost of the loans allegedly range from 300% to 950% APR, which is dozens of times more expensive than any reasonable form of credit
- Their excessive interest rates show that Silver Cloud Financial has no compunction against breaking state laws when it suits them
- Consumers have very little ability to sue the lender for abusing them due to their tribal immunity
The only way for these installment loans to be remotely affordable is to pay them off as soon as possible, preferably within a single pay period. Unfortunately, that would make them essentially glorified payday loans.
Just like with payday loans, it’s often impossible to pay them back in just a couple of weeks. If you need them in the first place, it’s unlikely that you’ll be able to pay them back plus interest so quickly.
Failure to pay them back practically rolls them over into another payday loan since they automatically transition into another costly two-week period.
How to Apply to Silver Cloud Financial
In the past, applying for a loan from Silver Cloud Financial would have been easy, though inadvisable. As we’ve stated, they have few qualification requirements that just about any working adult could meet, and the application would be similarly easy to complete.
However, as of early 2021, Silver Cloud Financial’s website states that the business is no longer entering into new loan agreements. Perhaps in an attempt to get away from the bad press generated by their previous lawsuits, they’ve revamped their brand and are now doing business as Uprova. To apply for a loan, applicants have to visit their new website and apply there.
While the name has changed, the process and application requirements are essentially the same. To qualify for a loan, applicants need only reside in one of the states they operate in, be at least 18, and show proof of consistent income. The application will also ask borrowers to identify themselves via their Social Security Number.
Better Alternatives to Silver Cloud Financial
Lenders like Silver Cloud Financial tend to attract people who don’t think they have any other option. They usually can’t get any help from friends or family or access traditional banking options due to their low credit scores.
People in that situation definitely have access to fewer credit options than people with better credit scores, but that doesn’t mean that they have to rely on tribal lenders. There are plenty of options out there that will be much more affordable. These are some of our favorites:
- Paycheck Advance Apps: Paycheck advance apps are perhaps the best initial alternative to payday and tribal loans. They allow borrowers to tap into their earnings during a pay period before their paycheck goes out. For those who are short a few hundred dollars and are just waiting until their paycheck arrives, these are perfect. They carry no interest and only require users to pay a small monthly fee to receive their services.
- Payday Alternative Loans: Payday loans are so prohibitively expensive that the government had to step in and help. Federal credit unions now offer payday alternative loans that provide all of the same benefits (short-term, small balance loans) to consumers in need of emergency funding. The key difference is that they come without the price tag.
Both of these options would be superior to an installment loan from Silver Cloud Financial or Uprova. They’re far less expensive, but still available to borrowers who are struggling with their creditworthiness.
The Bottom Line
If you wanted a Silver Cloud Financial review that would summarize whether or not you should work with the lender more succinctly, then here you go: Take your business elsewhere. Silver Cloud isn’t even funding new loans.
They’re too expensive to do much more than delay a financial emergency, and their disregard for state laws makes them particularly dangerous. If you can use one of the lending options we mentioned above, you’ll be much better off financially.
Even better, try to avoid taking on debt in the first place. If you find yourself needing to resort to external funding consistently, you’ll need to reduce your expenses or increase your income to become financially stable.