Payday Loans in South Dakota Under the 36% Rate Cap

South Dakota still allows payday loans, but since November 16, 2016, a licensed lender can't charge more than 36% a year, every fee included. At that rate, a $500 loan for 14 days costs no more than $6.90.

What South Dakota's 36% Limit Means in Dollars

Worked out from South Dakota law, not offers from lenders in our network; a lender can charge less.

The cap counts interest, fees and the cost of any add-on product or service sold with the loan. Late fees, returned-check fees and attorney's fees after you default aren't counted in it.

Initiated Measure 21: How Voters Capped Payday and Title Loans

Voters approved Initiated Measure 21 on November 8, 2016, and it took effect on November 16. It covers every loan a licensed money lender originated, refinanced, rolled over, renewed or flipped after November 15, 2016.

• A loan above the cap is void: the lender can't collect any principal, fee, interest or charge on it.
• Charging more is a Class 1 misdemeanor.
• No one may dodge the cap with disguised sale-leasebacks, pretend purchase rebates, or by making, offering, assisting or arranging a costlier loan by phone or internet, even from outside the state.

Payday and Title Loan Rules Still in South Dakota Law

• Payday loans: no more than $500 in principal from one licensee at a time.
• Short-term loans (six months or less): at most four renewals, each paying the fee and cutting the principal by at least 10% of the original amount.
• Title loans: one-month terms. From the fifth renewal through the eighth, you pay at least 10% of the principal each time; after the eighth, the loan is due in full and stops accruing charges.

All of them fall under the same 36% annual limit as an installment loan, so on a licensed loan the only real price difference is how long you keep the money.

Banks, Online Lenders and Who South Dakota's Cap Covers

The cap binds lenders licensed under SDCL chapter 54-4, the money lender license that payday, title and installment lenders all hold. State and national banks, bank holding companies, other federally insured institutions and South Dakota trust companies are exempt and lend under their own rules, as do sellers financing their own goods.

• Lending money in South Dakota without a license is a Class 1 misdemeanor.
• A loan to a South Dakotan from an unlicensed, non-exempt lender can't be collected, except for the principal you received.

Asking for a Licensed South Dakota Loan in Three Steps

1. Decide how much you need and over how long, and have your ID, proof of income and bank account details ready.
2. Submit one request through LendUp. Lenders in our network review it, and any offer shows the APR, payments and total cost before you sign.
3. Check the APR: from a South Dakota-licensed money lender, it can't be above 36% with every fee included.

Confirming a South Dakota Money Lender License

1. Search NMLS Consumer Access by the company's legal name or NMLS number; the Division of Banking links money lender lookups there.
2. Look for a South Dakota Money Lender license. Payday and title lenders hold the same license.
3. Each location must be licensed separately, so match the address to your offer.

Complaints are filed online with the Division of Banking. Questions: 605.773.3421.

• Military borrowers. Federal law caps most loans to active-duty servicemembers and covered family members at a 36% Military APR.

Common Questions

Official Sources

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