Payday Loans are Legal in South Dakota

Beware of predatory lending

Payday Lenders in South Dakota

Payday loans are short-term loans designed for people who are in need of money quickly and cannot wait until their next paycheck arrives. In South Dakota, payday loans are legal, but the state has some of the most restrictive laws surrounding them – including limiting how much interest and fees can be charged on loans as well as restricting borrowers from taking out multiple payday loans at once. Lenders operating within South Dakota must obtain a license in order to operate and there are limits placed upon loan amounts and repayment terms.

Despite the strict regulations in South Dakota, predatory lenders have emerged in the state, particularly online. These lenders often target vulnerable individuals who may not be aware of the state’s laws or have limited financial resources. It is important for borrowers to be cautious when applying for a payday loan and to do their research on the lender they are considering. Legitimate lenders will be licensed to operate in the state and will provide clear information about the loan terms and fees. It is important to avoid lenders who ask for upfront fees or make promises of guaranteed approval, as these are signs of a potential scam. By being informed and cautious, borrowers can avoid falling victim to predatory lenders and make informed decisions about their finances.

Payday Loan Laws

South Dakota has very strict regulations surrounding payday loans. While they are considered legal in the state, they are highly limited based on the usury cap that has been put in place. There are limits on the amount that can be borrowed and lenient rules surrounding rollovers.

The State of South Dakota has several pieces of legislation surrounding payday loans:

S.D. Codified Laws §54-4-36: Sets maximum loan amount, 36% APR cap and loan term maximums.
S.D. Codified Laws §54-4-66: Prohibits borrowers from having more than one outstanding payday loan at any given time.
S.D. Codified Laws §54-4-65: Prohibits lenders from rolling over any loan more than four times and requires that the borrower has paid all fees and reduced the principal amount of the loan before a renewal is authorized.

Loan Terms and Conditions

Maximum loan amount: $500

Maximum Interest Rate: 36%

Minimum loan term: no minimum in regulation

Maximum loan term: 6 months

Number of rollovers allowed: 4

Finance Charge: $1.39 (based on $100 dollars for 14 days)

Legal action: 6 Years

Certified Payday Lenders in South Dakota

Company Name	Company score	License Status
Big Picture Loans, LLC	8	Valid
Community Choice Financial, Inc	7.8	Valid
BlueChip Financial	6.8	Valid
Minto Financial dba Minto Money	6.5	Valid
CASHCALL, INC.	5.8	Valid
CASH AMERICA INTERNATIONAL, INC.	5.4	Valid

History of South Dakota Payday Loans

Since the 1990s and 2000s, short-term, high-interest loans have become prevalent in Oklahoma, including payday and car-title loans. Despite requiring payday lenders to be licensed, Oklahoma did not place any caps on fees, and this remained the case for over 15 years. In 2016, South Dakota waited to see the results of the proposed constitutional amendment which would limit the ability to set statutory interest rates for loans, but it was not passed. Shortly after, the state approved the Initiated Measure 21, which effectively capped payday loans at 36% APR and prevented the industry from creating any further loopholes. As a result, 121 lenders chose not to renew their licenses in 2017 and left the state, while 75 stayed until they collected on existing loans.

State Resources

How to file a complaint

The South Dakota Division of Banking accepts complaints against payday lenders. All complaints must be filed online through their website.

South Dakota Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

There are several options for repaying a payday loan. Contact the lender first and explain your situation. Borrowers may be able to negotiate a repayment schedule that reduces amounts owed, extends payment periods or decreases interest rates. Payday loan providers in South Dakota must offer a repayment plan and the lender cannot sue the borrower for a payday loan default until they have offered this extended repayment plan. Refinancing to a loan with a lower rate of interest may be another option. You may have to file bankruptcy in order to get the loan discharged but you should only consider bankruptcy as a last option and always consult an attorney before filing.

Support Resources

Types of Quick Loans in South Dakota

Lines of Credit Personal lines of credit are a flexible borrowing option in South Dakota that can be used for a variety of purposes. Unlike traditional loans, lines of credit provide borrowers with access to a revolving credit line that they can draw from on an as needed basis, rather than a getting a lump sum deposit into their bank accounts at the start of the loan. This allows for greater flexibility in both borrowing and repayment give that borrowers can choose to use only what they need and pay interest only on the amount used. In South Dakota, personal lines of credit are available through banks, credit unions, and other financial institutions.

Installment Loans Installment loans are a common form of borrowing in South Dakota, often used for large purchases or to consolidate debt. These loans provide borrowers with a lump sum payment that is repaid over a set period of time, typically in monthly installments. In South Dakota, installment loans are regulated by the state, with lenders required to be licensed and comply with specific rules and regulations.

Cash Advance Apps Cash advance apps are a convenient option for those in need of short-term cash loans in South Dakota. These apps allow users to borrow money quickly and easily without the need for a traditional bank or lender. It is important to note though that cash advance apps often come with high-interest rates and fees, so borrowers should carefully read the terms and conditions before using them. Additionally, some apps may not be available in South Dakota due to state regulations. So, make sure to research and compare different apps to find the most reliable and trustworthy option.

Alternatives to Payday Loans in South Dakota

Personal Loans

Personal loans in South Dakota provide an option for individuals in South Dakota who need access to funds for a variety of purposes, such as medical expenses, home repairs, or debt consolidation. These loans typically have fixed interest rates and repayment terms ranging from 12 to 60 months. To qualify, borrowers will need to meet credit and income requirements established by the lender. Some lenders may require collateral, while others offer unsecured loans. It is important to shop around and compare loan offers to ensure you are getting the best rate and terms possible for your unique situation.

Home Equity Loans

Home equity loans allow South Carolina homeowners to access the equity they have built up in their property to finance other expenses, such as home improvements, debt consolidation, or education expenses. These loans commonly have fixed interest rates and longer repayment periods than personal loans. Borrowers will need to have sufficient equity in their property and a good credit history to qualify. Make sure to shop around and compare offers from different lenders to ensure you are getting the best rate and terms.

Construction Loans

Construction loans are designed for individuals who are building a new home or making significant renovations to an existing property in South Dakota . These loans typically have variable interest rates and short-term repayment periods. Borrowers will need to provide detailed plans, budget estimates, and proof of income to qualify. Construction loans may require progress payments throughout the building process, and some may require a down payment.

Bad Credit Loans in South Dakota

For those with bad credit in South Dakota, securing a loan can be a challenging task. However, some lenders offer bad credit loans specifically designed to help those with low scores repair their credit. These loans tend to have higher interest rates and fees, so it is very important that borrowers carefully consider if they have the ability to repay the loan before committing to it. Options for bad credit loans in South Dakota can be unsecured but it is very likely they will be secured loans and co-signed loans instead.

South Dakota Small Business Loans

South Dakota provides several types of small business loans with different requirements and terms:

SBA loans: The Small Business Administration offers loans through its network of lending partners for eligible small businesses in South Dakota.
South Dakota Development Corporation: This program offers financing to businesses located in South Dakota, with loans ranging from $50,000 to $5 million.
Equipment financing: Equipment financing loans help businesses purchase or upgrade equipment with flexible repayment terms. The asset itself is often utilized as a form of security, allowing those with low credit ratings to qualify.
Invoice factoring: Invoice factoring loans allow businesses to sell their accounts receivable at a discount to a lender in exchange for immediate cash.
South Dakota Community Foundation: This foundation offers grants and loans to non-profits and small businesses in South Dakota.

VA loans in South Dakota

South Dakota VA loans are available to active duty military personnel, veterans, and eligible surviving spouses. These loans offer a range of benefits, including no down payment requirements, competitive interest rates, and no private mortgage insurance requirements. VA loans can be used to purchase or refinance a home, but borrowers will need to provide proof of military service and meet credit and income requirements that they lender may have. It is important to work with a VA-approved lender and carefully consider all terms and conditions before taking out a VA loan.

South Dakota Student Loans

Many options are available to South Dakota students to help finance their college education. These options include:

Federal Student Loans: South Dakota students have access to federal student loans, an invaluable financial resource that they can use for college tuition and other associated costs.
South Dakota Board of Regents: provides student loans to eligible students attending South Dakota public universities.
Dakota Corps Scholarship: provides financial assistance to students who commit to working in high-need professions in South Dakota.
Private Student Loans: Offered by banks, credit unions, and other private lenders, and often have higher interest rates than federal or state funding. Students can use these to cover education expenses that federal loans don't cover.

South Dakota Income Information

According to the 2021 U.S. Census, South Dakota had a median household income of $63,920, slightly below its national median of $69,021. South Dakota has a relatively diversified economy, with sectors such as healthcare, financial services, and agriculture contributing significantly to the state’s GDP. The state’s low unemployment rate and business-friendly environment have also attracted major employers in industries like technology and manufacturing. The poverty percentage in South Dakota in 2021 was 12.3%. Income and poverty levels vary drastically depending on the county. Lincoln County has the highest median household income of $84,260, while Todd County has the lowest, at $24,102.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on May 1, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: South Dakota. Accessed on May 1, 2023.

South Dakota Payday Lender Complaints

Below are trends associated with the top payday lenders in South Dakota, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
Big Picture Loans, LLC	3
Community Choice Financial, Inc.	2
BlueChip Financial	2
Minto Financial dba Minto Money	1
CASHCALL, INC.	1
CASH AMERICA INTERNATIONAL, INC.	3
Total Complaints	24

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on May 1, 2023.

Most Common Issues

Complaint type	Count
Charged unexpected interest or fees	9
Received a loan you never applied for	5
Can’t stop withdrawals from bank	4
Unable to contact lender	2
Struggling to pay loan	2

What are the main reasons residents of South Dakota apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Sioux Falls
Rapid City
Aberdeen
Brookings
Watertown
Mitchell
Yankton
Pierre
Huron
Spearfish

Box Elder
Vermillion
Brandon
Rapid Valley
Sturgis
Harrisburg
Madison
Belle Fourche
Tea
Dell Rapids

Dakota Dunes
Milbank
Hot Springs
Hartford
Mobridge
Pine Ridge
Blackhawk
Canton
Lead
North Sioux City

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Payday loans are typically not reported to the three major credit reporting agencies, and most lenders do not conduct credit checks as part of their application process.

What do I need to apply for a payday loan?

To apply for a payday loan in South Dakota, you will typically need to provide your identification, proof of income, bank account information, and contact information.

Can I cancel my payday loan?

Yes, you can cancel your payday loan in South Dakota. According to state law, you have until 5:00 p.m. the business day following the date of the loan to cancel the loan. You must return the full amount of the loan to the lender by the end of the business day.

Can a payday loan lender garnish my wages?

A payday lender in South Dakota can garnish your wages if they obtain a court judgment against you.

Can spouses have separate loans?

There is no specific law in South Dakota that prohibits spouses from having separate payday loans, but lenders may have their own policies regarding the approval of multiple loans for the same household.

When will I receive my funds if I am approved for a payday loan?

You will receive your funds on the same day or the next business day, depending on the lender’s policies and the timing of your application.

What happens if I can’t repay my payday loan on time?

The lender may charge additional fees and interest and take legal action to collect the debt.

When could I apply for another payday loan?

In South Dakota, you can apply for another payday loan as soon as your current loan is paid off.