Payday Loans: What Laws Your Lender Must Abide by in California

Payday Loans in California are allowed by law under Civil Code 1789.30 and Financial Code 23000. These laws combine to form all the relevant regulations on payday loans in the state. Consumers who want to find such online lenders who act in strict accordance with federal and state laws can research or the Yellow Pages online. One of the basic regulations is that all short term lenders must have a valid state license to be in business.

Rules on Lending:
Payday loans are set up to be short term high interest loans.

  • The Annual Percentage Rate (APR) of interest on a 14 day loan is 459 percent with additional fees and finance charges.
  • A lender may not charge over 15 percent per week for a payday loan.
  • The finance charge on a 14 day loan of $100 is $17.65.
  • Lenders must issue written legal contracts that cover all the details about the loan amount and terms and conditions as well as interest rates and finance charges.Get Cash Now

In the event an individual needs to report a case of lenders breaking state laws they should contact the California Department of Business Oversight (DBO). The website is

Consumer Issues:
Other limitations are put on consumers to make sure that no one is taking on too much debt.

  • A consumer is only allowed to hold one payday loan at a time and cannot take on a second loan until the first is repaid. That means that the consumer cannot take out a second loan to repay the first.
  • In the event of a bounced check the lender cannot press criminal charges against the borrower and can only charge a maximum collection fee of $15 for a returned check.

Consumers who are considering using a payday loan in California need to make sure they only deal with legitimate lenders in their respective state. It is also up to consumers to understand the terms and conditions of the contract.

Steve Burgess is the Spokesperson for Faaast Cash, which provides instant online payday loans and payday cash advance, servicing the entire nation. Steve has over 25 years of senior executive experience turning around, building and leading some of the fastest growing and most successful companies in America. He has his MBA, makes media appearances, and is a highly regarded speaker at conferences, corporate and business events, and leading universities. Steve is also a #1 bestselling author whose books include Purpose, Passion, Abundance, On an Enlightened Path, and Living in Abundance. Google +

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