South Carolina Installment Loan Laws
- South Carolina Board of Financial Institutions
- 3rd Floor, Suite 306, Edgar Brown Building
- 1205 Pendleton St
- Columbia, SC 29201
- Phone: 803.734.2020
- Fax: 803.734.2025
- www.bofi.sc.gov
- Consumer Finance
Among short-term loans and alternatives to credit cards, installment loans are starting to become more commonly used than payday loans and title loans because while they’re far from perfect, borrowers can sometimes use them without getting into deep debt traps that come with the other two loans. Alternative loans are often where consumers turn to when they’re in tough financial situations because they can get them much quicker than most bank loans, and lenders will usually be willing to overlook credit problems that may be preventing them from getting bank loans. However, installment loans, along with their counterparts in payday and title loans often are less regulated than bank loans, and while consumer protection agencies are trying to do more to prevent predatory lending, predatory lending is still a problem in states where installment loans are legal including South Carolina. And many lenders, even licensed lenders will usually look to find loopholes in existing laws governing them, or even count on consumers not being familiar at all with them. But by taking the time to get to know the state’s laws, you’ll be better informed on whether you should use South Carolina installment loans, and in some cases you may be entitled to keep the proceeds if the lender has broken laws.
Governing Body That Oversees Installment Loans In South Carolina
While payday loans and installment loans are usually not issued by banks or regular chartered financial institutions, the South Carolina State Board of Bank Control does oversee the activities of alternative lenders and ensures they are following any rules set forth in the state’s lending regulations. To make sure you’re applying for an installment loan with a legitimate lender, you need to make sure they’ve been licensed by the board to do business in the state. If they have been licensed, they are required to allow the authority to audit their books when asked. They also make sure that the lender is upfront about all the installment loan terms, doesn’t use false or misleading advertising about the online loan product and doesn’t attempt to mislead in terms of who runs the business.
Terminology For Installment Loans In South Carolina
The laws don’t really name South Carolina installment loans by the word ‘installment’, but they do include loans deemed as a cash advances of $7,500 or less according to Title 34 Chapter 29 in the books. Often what does differentiate installment loans from payday loans is their payment structure. Payday loans are often defined by the following structure:
- Personal loans that are for an amount that equals the borrowers weekly or biweekly income (usually around $300 on average)
- They need to be repaid completely or rolled over usually within a two week period
- They usually require an active checking account in good standing
Installment loans online have many similarities to these personal loans including lenders verifying income and an active banking account. But where they differentiate is in the payment periods.
- Installment loans are usually spread out over the course of months
- Payments can be made either biweekly or monthly, but they’re usually just a portion of the principal due coupled with a portion of the interest rate and finance charges
- Title 34 Section 29 outlines the maximum periods installment loans can go before they mature
Interest Rate And Finance Charge Laws
One reason you have to be careful with installment loans is that most states where they are legal do not cap the interest that can be charged on them, and South Carolina is no exception. State law does put caps on various finance charges though as specified in Section 29. You do need to be aware that you’re usually advised by consumer protection agencies to steer clear of installment loans due to the high interest and short-term only use they’re intended for. If you can pay off an installment loan before its final due date, the lender cannot charge you any penalties for paying it off early.
Best Way To Apply For Installment Loans
Once you’ve read up on South Carolina laws for installment loans and feel confident they’re your best option, you can apply for them. Applying for an online installment loan right here at our website is usually a great idea because you won’t have to fight any traffic to get to a downtown office, and usually the initial estimate form and later the full application can be done online and only take a few minutes. What you will need is information confirming your identity, income and banking which includes the following:
- A photo ID such as your driver’s license, passport or other approved government-issued document (no social security cards or birth certificates)
- A paycheck stub, bank statement or other approved financial document
- Your bank’s routing number and your checking account number
You’ll fill in the installment loan estimate form first to find out how much you’re eligible to borrow. Then a representative will call you to help you complete the rest of the application, and you’ll find out if you’re approved within seconds. You can then use your installment loan funds for your needs, but if you do have questions about any document a lender asks you to sign, or if you believe SC law may be violated by one of the terms, contact an attorney regarding the laws and regulations.
