South Dakota Payday Loans Laws

Payday loans are designed for people who are in need of immediate cash. This comes in handy for those who need fast cash for certain situations such as a much-needed car repair. Payday loans are a small-dollar loan which is paid within a small period of time and involves high interest rates. The application process for payday loans is very fast and convenient.

First, the lender will ask for the borrower’s contact information, bank accounts, and employment information. Then, the borrower will sign a check dated on his next payday. When the term of the payday loan is up, the lender will cash out the check to get back the money that was lent. The payment for the lender also includes the other charges and interest rates.

In South Dakota, the laws on payday loans are based on S.D. Codified Laws 54-4-36 et seq. Unlike many states in America, they have fewer regulations and limitations regarding the operations of payday loan companies within their state.

According to their laws, all payday loan companies within the borders of the state are required to have a license for operation. Also, these companies are expected by the authorities to follow the laws in their transactions with the borrowers. The lenders must explain the terms and conditions to all their customers. This is to ensure that they are fair enough to them. In case that the borrower is not able to pay the money lent, as well as the interest rates, a list of penalties, fees and finance charges should be provided.
The payday loans in South Dakota allow a maximum loan amount of $500. Since their state government laws do not specify the loan terms and interest rates, the payday lender companies are free to impose the terms as they deem acceptable. For example, they can approve a loan which should be paid in a period specified by their company.

It may be in a short span of time such as one week, or as long as six months. Also, since the state did not pose a limit on the interest rates, the payday loan company can decide how much interest they will place on the money that they will lend to a borrower.

South Dakota is one of the very few states that are lenient in payday loans. There is no maximum number of loans at one time. The borrower can apply for a loan as much as he wants, depending on the lender’s terms and conditions. Aside from that, the lender can allow renewal or rollover up to four times. Based on this fact, they are able to charge the borrower every time that the payment is not made within the agreed period.
This aspect may be advantageous to others who are seeking extensions if they do not have money to pay for it yet. Though this is the case, this may become a drawback because the lender can put additional charges on top of the amount and interest that the borrower is supposed to pay for.

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