A couple of months ago, Yahoo Finance launched a new app called Tanda, meant to enable peer to peer loans and/or help users save. While I was intrigued by the idea, I wasn’t sure it was for me and put off signing up initially. However, being the diligent personal finance blogger and reviewer that I am, I changed my mind a few days later and decided I needed to give Tanda a shot.

So how did it go? Well, there’s a lot to say about Tanda — starting with what the app is all about and where it gets its name:

What is Tanda?

Yahoo’s Tanda is a 21st-century twist on an age-old concept. For many years, families, friends, and others have participated in what are called ROSCAs — rotating savings and credit associations. Although these ROSCAs go by many names, the widely-used Latin America term for such groups is “tanda.”

The way tandas and Tanda work is that a group of individuals pool their money together on a monthly (or bi-monthly) basis to form an agreed upon sum. Then, each tanda member is given a position number that corresponds to when it will be their turn to take home the combined pot. As a result, those earlier in the rotation are able to utilize the funds as an interest-free loan while those in later positions can use the tanda to help them save up.

So how does Tanda adapt this concept to a digital app? First, it vets all applicants who use the app (more on that in a minute) and issues “Trust Scores” to each. Secondly, should a member fail to make their payments, Yahoo will step in to keep things going. With these safeguards in place, users don’t have to worry about joining a ROSCA with people they don’t know. However, if you’d like to start a private tanda with friends or family, the app allows for that as well.

Of course, since Yahoo needs to make money, there are some fees involved with Tanda, but only for some users. Currently users in the first position of any tanda will have an 8% fee taken from payout while those in the second position will give up 7%. That said, the app does incentivize users as well, paying a 2% bonus to those in the last position of any tanda. Aside from the payout fees for the first two positions, the app is free to use.

Signing Up for Tanda

As I mentioned, Tanda requires a bit of a vetting process in order for you to join. Thus you’ll need a U.S. bank account and need to provide some personal information in order to sign up. Additionally you’ll be limited to tandas with pools of $250 at first. Once you grow your trust score, you’ll then be able to take a place in higher dollar circles.

The first step in joining Tanda (after downloading the app, of course) is to set up a Yahoo account. If you don’t already have one, you’ll be asked to enter your phone number and verify it by receiving a text message with a code to enter. You’ll also input your basic information such as name, address, and birthdate at this time.

Step two is to verify your identity by once again entering your basic info but, this time, also confirming the last four digits of your social security number. Once that’s been verified, you’ll need to link your bank account. There are two options for this: 1) logging into your bank account using your username and password or 2) having Tanda make two microdeposits in your account, with you then confirming the amounts. Note that, while option one allows you to get started near instantly, the second can take one to three business days.

After you’ve fully joined, you can begin to view different circles to join — which happens to be where my first issue with Tanda comes in.

My Thoughts on Using the Tanda App

I’ll admit that the only reason I joined Tanda (besides wanting to offer my review) was to nab that 2% bonus that comes with being the last spot in the circle — meaning I would collect $255 while only putting in $250. Unforunately getting that position proved harder than I was expecting. First it seemed that many of the app’s early adopters had the same goal as I did and would start tandas to give themselves that last spot. Furthermore, while there is a sorting option for viewing circles, these options are limited to “Circle payout (low to high or high to low)” and “contribution amount (low to high or high to low).” It would be far more helpful if sorting options allowed you to sort by position preference instead of having to manually tap into each tanda to see what was available.

Eventually I found a circle with an open final slot and decided to join. Even after this, I was worried that the circle wouldn’t be filled because a day or two had passed and, instead of anyone else joining, one person had chosen to leave. To my surprise, the circle reached capacity soon after, with each member contribution $31.25 every two weeks for a total pot of $250.

It was around the time that my first tanda contribution was due that I had a mini-panic attack when I couldn’t find a way to actually make my payment. After looking around the Tanda website, I discovered that payments would be deducted automatically using the bank account I had linked when I first signed-up. That made sense, but then how could payments be late if they were automatically made? My best guess is that you could technically toggle your account to off in order to stop the automatic withdrawal from occurring, although I can’t be sure. In either case, the payment was triggered on the correct day and off we were… albeit quite slowly.

Since my withdrawal position won’t occur until June, I can’t say for certain how long it takes for the money to hit your account but, on the contribution side, transactions seems to happen very slowly. For example, while my contribution was initiated on February 23rd, it didn’t fully clear until March 1st, at which time my trust score updated as well. Obviously this isn’t a major problem as your payment still qualifies as on time, but there is something annoying about it. Like I said, hopefully these delays don’t affect payouts because that would be a major inconvenience — especially for those paying 7% or 8% to get their money.

Beyond those gripes, I also have to say that the Tanda app is oddly confusing to me and includes a number of seemingly useless features. Case in point: the home screen features a feed where you can see what circles each person is joining or leaving. Why? Who cares? Next to this feed is an option to just view such updates for circles your a part of, which seems much more reasonable. Meanwhile, the info concerning your account — such as when your trust score and what circles you’ve joined — are on the profile tab. From there, you’ll need to tap your tanda from the “Joined circles” section in order to view details such as the contribution and payout schedule. In my opinion, this is what should occupy the home tab. That said, at least the profile tab is what loads by default when you boot up the app.

Final Verdict on Tanda

Of the various finance apps I’ve reviewed in the past, Tanda is far from my favorite. While I do think the concept is interesting, I would personally only ever use it in order to get that 2% bonus. Otherwise the fees aren’t worth it and the middle positions are useless as I could be putting those funds to work in an online savings account or other interest-accruing location.

On top of that, the functionality of the app is lacking in a few areas. However I will say that Tanda has made some improvements since launch. For example, when I joined my first circle, selecting a position wasn’t as intuitive as it should be. Silly me was tapping the circle I wanted and getting nowhere but, thankfully, that method actually will set you in the right direction following an update.

In all, I’d say it may be worth setting up a Tanda account and scouting for final slots if a 2% return sounds good to you, if an 8% interest rate loan is something you need, or if you just really have trouble forcing yourself to save. But, despite its Yahoo backing (or perhaps even because of it), I’m not sure Tanda is an app that will have much staying power — although I could always be wrong.

This article was first published on Dyer News.

Kyle is author of “The E-Ticket Life” and “Write, Print, Publish, Promote” as well as a regular contributor to Dyer News, Moneyat30, and The Laughing Place.

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