Payday Loans are Legal in North Dakota

Beware of predatory lending

Payday Lenders in North Dakota

When unexpected expenses arise, payday loans offer a quick solution to access cash in a pinch. The most common reason people apply for payday loans is to cover emergency expenses that come up, some examples are medical bills or car repairs.

Despite the continued popularity of payday loans in North Dakota, they do come with high fees and interest rates that make repaying them difficult. In 2020, the average payday loan amount in North Dakota was $416, with an average fee of $53 per loan and the average interest rate was 487%. It is recommended to explore alternative lending options before committing to a payday loan.

In North Dakota, it is crucial to practice caution when choosing a payday lender. Borrowers should carefully research and compare different lenders, and be wary of any lenders that don’t disclose their fees and interest rates upfront. These lenders may engage in predatory lending practices. By being diligent in researching and selecting a reputable lender, borrowers can ensure they are making an informed decision and securing a loan that meets their financial needs.

Payday Loan Laws

Each state has its laws surrounding payday lending, and North Dakota is no different. There is a limit on the amount that can be given, maximum term, and restrictions on loan renewals and rollovers. Additionally, borrowers must be furnished with a copy of all loan terms in writing so they have a clear record of these terms, creating a sense of transparency between the borrower and lender.

The State of North Dakota has several other pieces of legislation surrounding payday loans:

Loan Terms and Conditions

Maximum loan amount: $500

Maximum Interest Rate: 521%

Minimum loan term: No minimum

Maximum loan term: 60 days

Number of rollovers allowed: 4

Finance Charge: 20%

Legal action: 6 Years

Certified Payday Lenders in North Dakota

Company Name	Company score	License Status
Big Picture Loans, LLC	7.9	Valid
Rosebud Economic Development Corporation	7.8	Valid
LDF Holdings, LLC	7.1	Valid
COMMUNITY CHOICE FINANCIAL, INC.	6.8	Valid
Risecredit, LLC	6.5	Valid
ENOVA INTERNATIONAL, INC.	5.8	Valid

History of North Dakota Payday Loans

In the 1990s, payday lending thrived in North Dakota through pawn shops, charging exorbitant triple-digit interest rates. The Legislature intervened by requesting pawn shops to stop offering payday loans due to their excessive rates. However, there was no specific legislation in place to regulate the industry at that time. The first payday loan law was passed on July 1, 2001, and officially set a cap on loan interest and fees at 20% of the loan amount. Since then, the regulations have remained the same, with only one amendment to the N.D. Century Code 13-08 in 2013. Even in the present day, North Dakota continues to abide by the same payday loan laws enacted in the early 2000s.

State Resources

How to file a complaint

The North Dakota Department of Financial Institutions points borrowers in the direction of the Consumer Financial Protection Bureau to submit complaints about payday lenders. However, there is an online complaint portal and downloadable version of the complaint form that can be mailed, faxed or emailed to their agency.

North Dakota Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

If you struggle with payday loan debt in North Dakota, taking several steps will be effective in finding relief. First and foremost is understanding your loan agreements and their terms – this should include understanding any interest and fees charges and total amounts due. Create a list of payday loans you have and total debt amounts with interest charges applied and fees included on them all as an initial step to relief. Negotiate with lenders for an affordable payment plan that fits within your budget, such as monthly installments rather than a lump sum repayment option. If negotiation fails, seek assistance from a credit counselor in creating an effective debt management strategy plan. Finally, explore other borrowing options, such as personal loans from banks or credit unions or borrowing money from family and friends. Remember the most crucial element: to avoid taking on more payday loans while working to clear away existing ones.

Support Resources

Types of Quick Loans in North Dakota

Payday Alternative Loans Payday alternative loans (PALs) in North Dakota provide an alternative to the traditional high-cost payday loans that many borrowers may find difficult to repay, creating a potential debt trap. PALs are small loans issued by federal credit unions that have longer repayment periods and lower fees than payday loans, making them a safer and more affordable option. The National Credit Union Administration oversees the PAL program, which was established in 2010, and regulates the loans to ensure that they are affordable, with an APR of no more than 28%, including an application fee of $20 or less. Borrowers can receive PALs in amounts between $200 and $1,000 and can pay back the loan in one to six months with no rollovers allowed. Additionally, borrowers can only receive up to three PALs within a six-month period. PALs provide a safer option for borrowers who need short-term funds and who may not have good credit.

Installment Loans Installment loans are a form of lending where borrowers pay regular installments over a set period, until the loan has been paid off. Installment loans have lower rates of interest and longer repayment periods than payday loans or title loans. They are therefore an affordable alternative for those who require quick cash, but can't pay it all back at once. However, North Dakota borrowers should be aware that the rates of interest and fees can vary from lender to lender.

Credit Card Cash Advances Credit card cash advances in North Dakota allow the borrower to withdraw money against their credit card balance. These advances are convenient, but they come with higher fees and interest rates than regular credit card purchases. Credit card cash advances usually accrue interest immediately, meaning that borrowers are required to pay interest on the money right away. Review the terms and conditions in your credit card agreement before deciding whether to take out a cash advance on a credit card. Weigh the benefits and costs.

Alternatives to Payday Loans in North Dakota

Personal Loans

Personal loans can be used for a variety of purposes including debt consolidation, home improvements or medical bills. These loans usually have fixed rates of interest and repayment terms ranging from several months to many years. Personal loans are available in North Dakota from traditional banks, credit cooperatives and online lenders. Rates and fees for personal loans can be affected by credit scores and other factors.

Farm Loans

North Dakota is well-known for its agricultural industry, and farmers are constantly looking for ways to invest in their businesses. Fortunately, there are several farm loan options available to help them do just that. The Farm Service Agency, a branch of the United States Department of Agriculture, offers a variety of loan programs for farmers in need of financing. These loans can be used to purchase land, equipment, or livestock, and can help farmers manage their cash flow during tough times. Another option is through the North Dakota Agricultural Credit Corporation, which offers loans specifically for farmers in the state. Whether farmers are just starting out or looking to expand their operations, there are several farm loan options available to help them succeed in North Dakota's robust agricultural industry.

Home Equity Loans

Home equity loans are a type of loan that uses the equity in a borrower's house as collateral. Due to the collateral, these loans tend to have lower interest rates than other types of loans. North Dakota homeowners are typically able to borrow up to 80% their home equity depending on the lender, and the borrower’s creditworthiness. These loans can be used to pay for home renovations, education costs, or medical bills. Before applying, the borrower should carefully consider the risks of using their home as collateral.

Bad Credit Loans in North Dakota

North Dakota bad credit loan are designed for borrowers with low credit scores or a limited credit history. Lenders may charge higher interest rates and fees for these kinds of loans due to the increased risk that they are taking. The amount borrowed could also be lower. Before taking out a bad credit loan, borrowers should always to do thorough research, compare fees and terms from various lenders. Only with making timely payments and practicing responsible credit use can borrowers begin to rebuild credit scores.

North Dakota Small Business Loans

There are several types of small business loans available in North Dakota, including:

SBA loans: Loans that are partially guaranteed by the U.S. Small Business Administration and are designed to help small businesses access capital and obtain favorable loan terms.
USDA Rural Development Business & Industry Loan Program: A loan program for businesses located in rural areas to finance real estate, machinery, and equipment.
CommunityWorks North Dakota: A microloan program for businesses with fewer than five employees and annual revenues of less than $2 million.
Dakota Business Lending: A nonprofit organization that offers various loan programs to small businesses in North Dakota.
Rural Development Business & Industry Loans: Loans for businesses in rural areas to support business development, employment, and improve the economic and environmental climate.

VA loans in North Dakota

VA loans are government-backed mortgage loans that offer many benefits to eligible veterans, service members, and their surviving spouses residing in North Dakota. These loans provide an opportunity for these individuals to purchase a primary residence, including single-family homes, townhouses, and condominiums. One significant advantage of VA loans is the ability to finance up to 100% of the home's value with no down payment required. Additionally, VA loans, in North Dakota, do not require private mortgage insurance, saving borrowers thousands of dollars over the life of the loan. Eligibility criteria for VA loans include meeting specific military service, credit score, and income requirements and obtaining a Certificate of Eligibility from the VA.

North Dakota Student Loans

Many options are available to North Dakota students to help finance their college education. These options include:

Federal Student Loans: These loans are offered by the federal government and include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.
North Dakota Career and Technical Education Scholarships: This scholarship program is available to North Dakota high school graduates who plan to pursue a career in a high-demand field.
Dakota Education Alternative Loan: A loan available to students in North Dakota to help cover the cost of education after other forms of financial aid have been exhausted.
Private Student Loans: Loans from private lenders, they commonly have higher interest rates and may require a co-signer.

North Dakota Income Information

According to the 2021 U.S. Census, North Dakota had a median household income of $68,131, very close to the national median of $69,021. TNorth Dakota has a diversified economy, with agriculture, energy, and manufacturing being the major sectors. The state is a leading producer of oil, natural gas, wheat, and other crops, which contribute significantly to its economy. Because of this, median household income and poverty levels vary by county in North Dakota, with Dunn County having the highest median income at $82,750, 26.7% above the state average, and Sioux County has the lowest at $41,893, 35.5% below the national average. The poverty percentage in North Dakota in 2021 was 11.1%.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on April 18, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: North Dakota. Accessed on April 18, 2023.

North Dakota Payday Lender Complaints

Below are trends associated with some payday lenders in North Dakota, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
Big Picture Loans, LLC	3
Rosebud Economic Development Corporation	2
LDF Holdings, LLC	1
COMMUNITY CHOICE FINANCIAL, INC.	1
Risecredit, LLC	1
ENOVA INTERNATIONAL, INC.	1
Total Complaints	15

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 30, 2023.

Most Common Issues

Complaint type	Count
Charged unexpected fees	6
Unable to stop withdrawals from bank	2
Can’t contact lender	2
Applied for loan but did not receive funds	1
Incorrect information on report	1

What are the main reasons residents of North Dakota apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Fargo
Bismarck
Grand Forks
Minot
West Fargo
Williston
Dickinson
Mandan
Jamestown
Wahpeton

Devils Lake
Valley City
Watford City
Minot AFB
Grafton
Lincoln
Horace
Beulah
New Town
Grand Forks AFB

Hazen
Rugby
Casselton
Bottineau
Carrington
Lisbon
Stanley
Oakes
Mayville
Langdon

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Payday loans are typically not reported to the three major credit reporting agencies, and most lenders do not conduct credit checks as part of their application process.

What do I need to apply for a payday loan?

To apply for a payday loan in North Dakota, you typically need to provide proof of income, such as a pay stub or bank statement. You will also need to provide personal information, such as your name, address, and Social Security number, as well as information about your employment and banking history.

Can I cancel my payday loan?

North Dakota law allows borrowers to cancel their payday loan by 5 p.m the next business day without penalty or interest by notifying the lender in writing and returning the full loan amount.

Can a payday loan lender garnish my wages?

Yes, payday lenders can garnish up to 25% of your disposable income if they get a court order to do so.

Can spouses have separate loans?

Yes, spouses can have separate payday loans in North Dakota as long as they individually meet the lender’s eligibility requirements and can provide the necessary documentation and information to apply.

When will I receive my funds if I am approved for a payday loan?

Funds are typically received on the same day or the next business day after loan approval, and can be disbursed through various methods, such as direct deposit.

What happens if I can’t repay my payday loan on time?

If a borrower is unable to repay their payday loan on time in North Dakota, the lender may charge additional fees, extend or roll over the loan, report the delinquent account to credit bureaus, or pursue legal action.

When could I apply for another payday loan?

Borrowers can apply for another payday loan three days after they have paid off their current payday loan.