Fast Payday Loans Up To $5,000

California Payday Loans Online

A payday loan is a short-term, unsecured loan with a high interest rate typically used to cover unexpected expenses. The borrowers apply for such a cash advance online and are obliged to return that sum when their paychecks arrive with a specified interest rate.

Regulations for Online Payday Loans in California

If you reside in California, you may be able to receive cash for short-term financial needs by taking out a payday loan. In CA, you will encounter this type of loan by the term “deferred deposit transactions”. 

However, certain regulations must be followed. All lending firms must be licensed by the Department of Business Oversight to function in the state. Such a step was adopted to safeguard the consumers’ rights and keep them protected from fraud.

All interactions between a lender and a borrower must be specified in full in a legal contract. In addition to the loan amount, the agreement should include information regarding the loan’s terms, such as interest rates and finance fees – more on these below.

What Are the Applicable Rates and Fees?

The state of California permits payday loans up to $300. Below you will find the fees you need to keep in mind while applying for a deferred deposit transaction in California:

  • The charge for each $100.00 borrowed is $17.64.
  • Finance charges should not exceed 15% for every $100 of the amount advanced.
  • Additional interest is not permitted by law if a lender freely agrees to extend the payment period.
  • The Annual Percentage Rate (APR) equals 460%.

When signing a payday loan contract, you agree to these rates. But what happens if you can’t return the sum to the lender on time?

Postponing the Repayment

Under the terms of the Financial Code 2300 section, a licensee may postpone a customer’s check deposit for up to 31 days. However, the lender reserves the legal right to refuse this request.

A borrower who is unable to pay the sum back on time can request an extended payment plan (EPP). A lender has two choices in this case:

  • To approve a customer’s request for EPP but not charge any additional costs.
  • To refuse this request.

Let’s take a look if it is worth taking out a payday loan in California.

Pros and Cons of Taking Out Payday Loans in CA

The advantages of online payday loans are:

  • Accessibility and ease of approval.
  • Fewer restrictions than with other types of loans.
  • No credit history check.
  • Not secured by personal property. 

The disadvantages of online deferred deposit transactions are:

  • Higher interest rates.
  • Only short-term borrowing opportunities.
  • Unlikely to have an influence on establishing a better credit score.

When signing a payday loan contract, it is important to keep all these factors in mind and notice whether the written agreement matches the oral discussions with the lender to avoid any miscommunication.