Payday Loans

South Dakota Payday Loan Laws

South Dakota is one of those very few states that have made almost no attempts to restrict the predatory nature of short-term cash advances that are issued as payday loans. As per South Dakota payday loan laws, payday lending programs are permitted in this state, but lenders must abide by the licensing law or the small loan act law. It means a payday loan company must be duly licensed with the state authority in order to be able to issue cash advances to consumers residing in this state. However, the state laws are not very clear about the licensing requirements of those companies who operate their payday lending business through Internet.

No specific Restrictions

The South Dakota payday loan laws have not imposed any specific restrictions regarding collections, repayment plans, Interest rates, finance charges, repayment period, or maximum number of loans that can be issued to a single borrower at one time. It means payday lenders have an open playground to play their predatory lending game. It entirely depends upon your financial judgment ability. The matter of fact is that borrowing payday loans in South Dakota to meet your urgent short-term small financial needs is a bad financial decision. There are many better alternatives available out there and you are advised to focus on the same if you need small amount of money for a short period of time, such as borrowing from credit unions or using overdraft facility (if available) from your bank. Even taking cash advance using your credit card can be a much cheaper option. Though still expensive, if you compare it with the interest rates charged on payday loans, you will find it a more affordable option. Most importantly, whatever alternative option you use, make sure you repay the loan in time if you do not want to invite financial troubles.

Four Times Rollovers Are Permitted

In order to make things worse for the borrowers, South Dakota payday loan laws have also permitted a maximum four times rollovers or renewals of loans if the borrowers do not pay off the loan within the set repayment period.

Maximum Loan Amount Per Account

As per the laws, lenders cannot issue more than $500 per payday loan account. If a lender is issuing more than the specified limit, it will be considered as illegal and you have the right to file a complaint against them.

You can contact the South Dakota Division of Banking for more detailed information about your rights and legal options regarding payday loans. Their fax number is (605) 773-5367, phone number is (605) 773-3421, and address is 217 1/2 West Missouri Avenue Pierre SD 57501. However, since the South Dakota payday loan laws have not left much scope to protect you as a borrower, you should not expect any valuable help them. The best way to protect yourself against this type of predatory lending is never to borrow such loans. These easily available cash advances can be very risky and expensive, which can push you into a viscous cycle of debt.

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One Response to “South Dakota Payday Loan Laws”

  1. Macc says:

    Pay day lending programs are in the condition in South Dakota. There is not even a single restriction available by the law department to save the rights of pay day borrowers. There is no restriction about the interest rules, finance charges etc. If the borrowers fail to repay the loan, there is no specific condition about the repayment plan. The worst thing is that the loans can be even roll-overs for 4 times. The creditors can go for roll-overs legally if the borrower is unable to repay the loan amount in a specific time limit. It is certainly not advisable for a person to go for taking pay day loan in South Dakota. It is better to go for other options available like borrowing money from credit unions or taking cash advance from credit card. It will be a little bit more expensive yet it is safe than pay day loans. But the repayment of loan with in specific time limit is very important otherwise your financial condition can become even worse. In the state of South Dakota, a lender can not issue loan of more than the maximum limit specified in the state if any body do then it will be considered as illegal and the borrower can file a complaint against them.

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