Personal Loans in South Carolina: What Licensed Lenders May Charge

How the filed-rate system works

Section 37-3-201 of the South Carolina Consumer Protection Code (Title 37) gives a supervised lender three ways to price a loan. Which one applies depends on the size of the cash advance.

Under section 37-3-305, a lender that makes supervised or restricted consumer loans must file a maximum rate schedule with the South Carolina Department of Consumer Affairs, stated as APRs for each kind of loan: unsecured personal loans, secured personal loans, real estate loans, open-end credit and all others. The lender must post the schedule in a conspicuous place in each office in the state. If it does not file by January 31, its charges may not exceed 18% a year until it does.

The unconscionability standard

Section 37-5-108 lets a court refuse to enforce a loan agreement, or strike an unconscionable term, and award actual damages. Among the factors the court weighs: whether the lender knew or should have known that you could not make the payments, given your income, other debts and job; whether it took advantage of your inability to protect your interests; and whether a charge substantially exceeds the usual and customary charge for that kind of loan.

This is a protection you raise after the fact, usually with a lawyer, not a limit a lender must stay under before it lends. A high filed rate is legal on its face, so the APR on the disclosure is still the number to judge before you sign.

Who needs a license and who does not

Under section 37-3-502, only a supervised financial organization or a business licensed by the State Board of Financial Institutions may make supervised loans. The Consumer Finance Division licenses companies, other than depository institutions and insurance companies, that make consumer loans above 12% APR not secured by real estate. Applications go through NMLS, and a website used to make supervised loans needs a separate license.

• Banks and credit unions are supervised financial organizations and do not need this license; a bank may charge the rates its home state allows.
• Online lenders that partner with a bank may make loans through that bank. Ask who the lender of record is.
• Payday and auto title loans follow their own rules. Our sister site Lendmira covers them on its South Carolina lending laws page.

Late charges and paying early

The lender may charge a delinquency fee only on an installment not paid in full within 10 days after its due date, and section 37-3-203 limits its size. You may prepay a consumer loan in full at any time without penalty. On a precomputed loan, the lender must rebate at least the unearned part of the finance charge, though it may keep a minimum charge of up to $15 if the contract provides for one.

On the National Consumer Law Center's comparison of a $2,000 two-year loan, neighbors take a different approach: North Carolina caps that loan at about 35% APR and Georgia at about 32%. The state rules map shows every state side by side.

Check a lender and file a complaint

1. 1 Look up the license on NMLS Consumer Access, or ask the Consumer Finance Division at (803) 734-2020, before you apply.
2. 2 Ask for the posted rate schedule and keep the Truth in Lending disclosure, the agreement and any messages about fees.
3. 3 Complain to the Consumer Finance Division about a licensed lender, or to the Department of Consumer Affairs through its online complaint form or at (800) 922-1594.
4. 4 Send a complaint to the CFPB as well if the lender is a bank or a bank partner. How to verify a lender lists what to check.

Questions people ask