Payday loans in South Dakota

Are payday loans legal in South Dakota?

South Dakota caps the cost of small loans at 36% APR, so traditional payday loans with triple-digit rates are not offered by licensed lenders there.

The governing law is S.D. Codified Laws 54-4-36 et seq… South Dakota Division of Banking licenses lenders and takes complaints.

What the 36% cap means

A lender licensed in South Dakota cannot charge more than 36% APR on a small loan. On $300 borrowed for two weeks, 36% APR works out to about $4.14 in interest. At that price the two-week payday loan is not a viable product, so storefront payday lenders do not operate in South Dakota. Longer installment loans from licensed lenders and credit unions are the legal options.

Before you deal with an online lender

1. Look the company up with South Dakota Division of Banking. No license, no loan.
2. Never pay a fee up front to get a loan. That is the mark of an advance-fee scam.
3. Read the agreement for the finance charge, the APR and the due date before you give out bank details.

If you cannot repay a loan in South Dakota

Contact the lender before the due date and ask for a payment plan in writing. If a lender or collector breaks the rules, file a complaint with South Dakota Division of Banking and with the CFPB. Our guide to what happens if you don’t pay covers each step.

Lower-cost options in South Dakota

• Credit union payday alternative loans (PALs): $200 to $2,000 at no more than 28% APR.
• A payment plan with the landlord, utility or hospital you owe often costs nothing.
• Local assistance: dial 211 for rent, utility and food programs near you.

See all payday loan alternatives or work out a loan’s price with the cost calculator.

How South Dakota got here

Initiated Measure 21 passed in November 2016 with about 76% of the vote, capping consumer loans at 36% APR. Most payday lenders in the state closed within months.