South Dakota Payday Loan Laws and Regulations

South Dakota Payday Loan Laws and Regulations

Are Payday Loans legal in South Dakota?

Short-term Payday Loans in South Dakota are illegal according to  S.D. Codified Laws 54-4-36 et seq.. These documents also cap the APR at 12%.

Remember that regardless of this, there are other loan options available to cover your urgent expenses fast such as Installment Loans in South Dakota and Personal Loans in South Dakota.


As we can see, South Dakota Division of Banking, 1601 N. Harrison Ave., Suite 1 Pierre, SD 57501, (605) 773-3421 caps all short-term loans at South Dakota Division of Banking, 1601 N. Harrison Ave., Suite 1 Pierre, SD 57501, (605) 773-3421 APR. 

For other details  and information on Payday Loans in South Dakota contact South Dakota Division of Banking, 1601 N. Harrison Ave., Suite 1 Pierre, SD 57501, (605) 773-3421.

Why are Payday Loans illegal in South Dakota? 

The Government considers Payday Loans too expensive and often associated with lenders’ predatory practices. That’s why in South Dakota Payday Loans are illegal according to  S.D. Codified Laws 54-4-36 et seq. which caps the APR at .

It caused most lenders stop issuing short-term small-dollar loans as it became not profitable. Still, there still exist some banks and online companies offering similar types of cash advance suitable to cover any unexpected emergencies.

South Dakota Payday Loan laws 

Payday Loans in South Dakota share the same characteristics as short-term cash advances in other states but due to high cost and short repayment terms they are prohibited in South Dakota. Lenders can’t legally operate because of the rate cap set by the authorities. But we can let you compare other options available in South Dakota.

If you haven’t succeeded in finding the necessary cash advance, there are always other options to receive the necessary funds in South Dakota: unsecured Installment Loans, bad credit Personal Loans, Title Loans, Check Cashing, Pawn Shops, etc.

South Dakota Payday Loans online laws 

Usually, the state’s Payday Loan laws concern both storefront and online lenders. Online lenders should also operate in accordance with all relevant state and federal laws. Otherwise, they may be liable to South Dakota Division of Banking, 1601 N. Harrison Ave., Suite 1 Pierre, SD 57501, (605) 773-3421 for law violations. 

For years, the Attorney General’s office has worked hard to eliminate all forms of payday lending in South Dakota. However, not all the efforts were successful as usurious loans are still available online (regardless of the fact that storefront payday lenders are no longer available in South Dakota).

Does South Dakota law allow Payday Loans for bad credit borrowers? 

The average credit score in South Dakota is 700, placing it in the good range. But it doesn’t mean that those who have a worse credit can’t apply for the necessary cash advance in South Dakota. 

  • First of all, there’re some companies in South Dakota providing similar to Payday loans services to borrowers with both good and bad credit score.
  • Secondly, you can always find a cosigner to increase your chances of being approved for a bad credit Payday Loan.
  • Find out how to improve your credit score and do your best to do it fast. 
  • Or consider taking out a bad credit Installment Loan, or bad credit Personal Loan.

South Dakota Payday Loans news  – latest changes

Payday Loans in SD have always been capped by the interest rate of 36%. But lately, the Federal Deposit Insurance Corporation has attempted to change the situation with quick small loans. They reconsider the way banks handle loans.

The new rule would allow banks to repackage loans as innovation and thus bring back the payday loan industry.

“At stake are so-called “rent-a-bank” schemes, in which banks heavily regulated by federal agencies like the FDIC enter into relationships with largely unregulated non-bank entities for the principal purpose of allowing non-banks to evade state usury laws,” the AGs said in a letter sent earlier this month.

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