South Dakota Payday Loans Made Easy
There are many situations where money runs out before the next paycheck comes in. Often, a financial emergency such as a broken down car or an unexpected home repair can leave you scrambling to figure out how to pay the bills while you wait for your check. In these situations, a payday loan or what is also known as a fast cash loan may be the answer.
A payday loan is a short - term loan that lasts for a few days or a few weeks until your next payday. Unlike many loans issued by banks or by credit card companies, there is typically no credit check and minimal qualifying requirements in order to obtain a payday loan. As long as you are able to prove that you have income coming in and provide paystubs and/or a bank account, then you will generally be able to obtain a payday loan.
Payday loans provide important lifelines to those who might not otherwise be able to get the quick cash they need to make their bills. For most people, getting a payday loan is a far better choice than having a car repossessed or having utilities shut off or being late on rent simply because the money ran out a few days before the paycheck came. Being able to get a loan even with bad credit can be difficult but payday loans provide a solution.
Despite the benefits associated with payday loans, however, these loans have some downsides and they are not the right solution in all cases. The biggest downside to a payday loan is that there is a high cost to borrowing money. While you always have to pay some cost for borrowing, whether in the form of fees or interest rates, the amount that you need to pay to borrow with a payday loan tends to be higher than most types of credit.
Typically, because payday loans are short - term loans, there is no interest charged. Instead, you are charged a fee for the loan. You can, however, determine the effective interest rate or annual percentage rate by considering how much the fee is compared with the loan amount and term. For example, if you pay a 17.5 percent finance charge on a $100 loan that you take for a total of 14 days, your effective annual percent rate that you are paying to borrow the money exceeds 450 percent. Since most credit cards have interest rates below 30 percent and most mortgages have APRs below 6 percent, it is easy to understand just how high the interest rate actually is.
Because of the high rates, most financial experts advise against taking payday loans. The reality, however, is that sometimes these are the best or only option as the fee can be less than the costs of not being able to get to work because of a broken down car or less than the fees associated with having electricity service or utilities turned back on. You do, however, need to be careful that you use payday loans only in situations where it truly makes sense to use them so you are not digging yourself into a deep financial hole.
Payday Loan Laws in South Dakota
For those living in South Dakota, there are few laws that directly limit or impact the payday industry. The only actual limit associated with a fast cash South Dakota loan is that you may not borrow more than $500. Payday lenders are permitted to charge any fees or interest rates that they wish to charge and that you agree to pay. South Dakota also permits payday loans for check cashers.
Stay Educated About Payday Loans
The lax regulatory climate for a South Dakota fast cash loan means that you must be very careful and understand what you are getting into. Many other states in the U.S. have passed bans on payday loans or have imposed serious limitations on maximum interest rates, but this is not the case in the state of South Dakota. This makes you responsible for making your own informed choice about whether a payday loan is the right one for you.