California is a state in the pacific region of the United States. The economy of this state is the largest in the country and one of the largest in the world. It is the highest populated state and third largest by area.
Payday loans in California are a quick way to get a cash advance from various lenders available in the market. Payday loans are a tried and tested way to increase your cash deposit in an emergency situation which the borrower can payback when their salary is credited in the account.
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California has more strict legislation for payday lending compared to other states. According to current legislation in the state of California, both storefront and online lenders are legal under California civil code 1789.30 and financial code 23000. These two codes contain all the relevant rules and regulations lenders must follow for payday lending.
The state also requires all lending companies to have a license to operate. Some of these rules are defined further:
- Loan amount – Maximum loan amount can be 300$, however, there is no specific minimum limit.
- Tenure – Maximum tenure of 31 days and no minimum tenure.
- Cost – Maximum 15% of the amount per week. Finance charges on a 14 day 100$ loan are around 17.65 so the borrower will have to pay back an amount of 117.65$.
- Annual Percentage Rate – based on above information the APR will amount to around 459%.
- The Number of loans – A borrower can only one loan at any given time.
- The Maximum number of rollover loans allowed – None. A borrower must repay their payday loan completely before applying for the next one. Finance charges on rollovers are illegal in the state of California. A borrower is also not allowed to take a second loan to pay back the first.
- Repayment plan – A Repayment plan must be established with the terms of lending. Borrowers must pay the amount and finance charges back in one lump sum.
- Legal contract – A legal contract of lending agreement with all transactions between lender and borrower is required. This agreement must contain all information about the loan related to amount, terms & conditions, interest rates, and finance charges.
- Non-Sufficient Funds – If a consumer does not have sufficient funds in their account, the lender may charge a 15$ fee.
- Criminal proceedings – If a cheque is returned due to insufficient funds in the account of the borrower, the lender is not allowed to take any criminal action against the borrower.
- Information that can be asked from borrower – Online Payday loans usually do not require credit checks, however, some lenders may ask for some information from borrowers, such as ID, address, contact information, sources of income and an open checking account.
Consumers should be aware of what they should do if any lender is not complying with the rules stated above. The consumer must contact and inform The California department of business oversight (previously known as California Department of corporations and department of financial institutions). Consumers should understand the rules and regulations behind these loans, by gaining this knowledge of the process, local laws and regulations, pros and cons, the consumers can protect themselves and get the best out of these short-term loans.
There are various lenders available in California, we have listed some of them for you below:
- Direct Lenders, online and store.
- CashNet USA – Large online lender.
- My Payday Loans – Long-time direct lender and now also lends online.
- Money tree – Offer online payday loans of 255$ in California.
There are many more lenders available online, you should always compare multiple options and check which of them most satisfies your need.