South Dakota Aims to Cap Payday Loan Interest Rates

South Dakota Aims to Cap Payday Loan Interest Rates

There’s a push in South Dakota to limit the APR payday loan companies can charge consumers. This is great news for people who desperately need cash for emergency repairs or bills. If this passes, you’ll be able to borrow the money you need, but the amount you pay in interest will be much lower.

Current Cash Advance Loan Laws

Currently, South Dakota’s laws bar a payday loan company from loaning to military members unless the APR is no higher than 36 percent. Non-military borrowers are not protected from exorbitant interest rates. Borrowers are legally protected by laws that state the information in the loan papers must include an explanation of all fees and charges, including the interest, and it also must cover the charges if you roll your loan into a new one. There is, however, no limit for the APR if you are not in the military.

Changes on the Horizon

The South Dakotans for Responsible Lending are tackling the payday loan market by requesting that the APR be capped at 36 percent for everyone, not just the military. They are proposing that voters get their say on the November ballot.

There is pending litigation by one company that offers payday loans though. The owner states that if she has to lower the interest rates her company charges to 36 percent, she will be forced to shut down her business.

All eyes are now on the November election to see what South Dakota’s residents have to say about payday lending and its interest rates and fees. If voters pass this, it will completely change the payday loan market in South Dakota.