What a title loan costs — before South Dakota’s rules
A title loan is usually a single-payment loan due in 15–30 days at around 25% per month — roughly 300% APR — secured by your vehicle. The defining risk is not the rate but the collateral: miss a payment and the lender can repossess the car, and research finds about one in five borrowers eventually loses the vehicle. Where a state caps rates low, single-payment title lending is not offered and a loan above the cap is generally void.
The law in South Dakota
- Rate cap
- 36% maximum APR (all-in, inclusive of all fees and charges) on money-lender loans, adopted by Initiated Measure 21 in November 2016 (76% voter approval). Charging above the cap is a Class 1 misdemeanor and the loan is void and uncollectible.
- Key law
- Initiated Measure 21 (2016), codified at S.D. Codified Laws ch. 54-4 (money lenders); 36% rate cap.
- Enforcement
- Regulated by the South Dakota Division of Banking. After IM 21 took effect, payday and title lenders that had operated under uncapped SDCL 54-4 licensing largely closed or exited the state because loans over 36% are void.
South Dakota's Initiated Measure 21 (2016) imposed a 36% all-in APR cap; loans exceeding it are void and charging more is a Class 1 misdemeanor.
What it means for a South Dakota borrower
You cannot get a traditional high-cost car title loan in South Dakota. State law caps the annual rate at 36% including fees, which title lenders say is too low to operate, so storefront title lending effectively ended after 2016. Any loan charging more than 36% is legally void and cannot be collected.
If you already have a title loan in South Dakota
A loan that violates South Dakota’s ban may be partly or fully unenforceable — which changes your options with the lender and any collector. This is general information, not legal advice.
- Check whether the lender is licensed in South Dakota — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the South Dakota attorney general and the CFPB.
- Ask whether the balance is even collectable under South Dakota law before you pay a collector.
Cheaper first — try these before a title loan in South Dakota
Title Loans and tribal lenders in South Dakota
Many online lenders that market title loans to South Dakota residents are tribal lenders arguing their sovereignty places them outside state rate caps — a separate legal question this site tracks in depth. For which tribal brands lend to South Dakota residents and how state law applies to them, see the South Dakota tribal-lending page.
Tribal loans in South Dakota →Frequently asked questions
Are title loans legal in South Dakota?
In South Dakota, a high-cost single-payment title loan is not legally viable. The state’s rate cap or an outright ban makes a ~300% APR title loan void or unavailable, so licensed title lenders do not operate — and a lender that lends anyway is on weak legal footing.
What is the maximum title loan rate in South Dakota?
36% maximum APR (all-in, inclusive of all fees and charges) on money-lender loans, adopted by Initiated Measure 21 in November 2016 (76% voter approval). Charging above the cap is a Class 1 misdemeanor and the loan is void and uncollectible.
What can I do about a title loan I already have in South Dakota?
Because South Dakota effectively bans high-cost title loans, a loan that exceeds the state limit may be partly or fully uncollectible. Check whether the lender is licensed in South Dakota — many high-cost online lenders are not. This is general information, not legal advice.