Even though getting cash payday loans in California is perfectly legal, the list of various restrictions established by the current legislation is long enough to confuse a first-time borrower. So, getting familiar with the current loan terms may allow you to get a payday loan on favorable conditions.
The main requirements imposed on the terms of every loan in the state are a subject to the Civil Code 1789.30 and the Financial Code 23000. Additional legal restrictions imposed by the state prohibit loan transactions to be made without a detailed legal contract. Such a contract includes detailed information about the amount of a loan, the maximum term, and interest rates. Of course, all loaning companies in California are obliged to have a license from the state.
The maximum loan amount legally permitted in the state is $300. The maximum number of active loans permitted for one person is one; a borrower should repay the loan before asking for another one. A credit user is legally obliged to repay a loan within a period of 31 days and this term cannot be renewed. A borrower is expected to repay the loaned sum before the end of the term; a lender may agree to prolong the payday term but no additional interest is allowed in such a case. In other words, the decision on the loan extension is made exceptionally at the discretion of a lender.
The maximum charge per week is 15%. The maximum charge for a standard 14-day loan of $100 is $17.65 and APR for such a loan would be 459%.
The provided figures suggest that the legal restrictions in the state of California are comparatively strict. The maximum loan, as well as the maximum loan term, are rather small in comparison with most of the states. However, additional documentation requirements notably increase the safety parameters for both lenders and borrowers as well as general business transparency.
In fact, the loan conditions for credit users with no history of credit violations are generally more favorable. Nonetheless, the chances to obtain a payday loan are virtually unaffected by the borrower’s credit history. Online loan companies perform no check-ups of the clients’ payment behavior.
This easing of the loan requirements is possible because of two reasons. Firstly, a relatively small maximum loan amount legally allowed in the state stimulates borrowers to make more short-term loans instead of a limited number of great long-term ones. Secondly, since the rollovers are strictly prohibited, as well as all types of charges for extensions, most clients tend to repay relatively small loans within the established period in order to apply for another loan.
As a matter of actual practice, the only presumable restriction one may deal with when taking a payday loan, is the need to conclude a new detailed contract for each new loan even when dealing with the same lender on a continuing basis. Obviously, in this case, you are obliged to make sure that your debt is fully repaid.
Although all payday cash transactions in California must be indicated in detailed legal contracts containing data on both lender and borrower, you still can easily apply for a loan online, avoiding dealing with actual papers. Most data required to accomplish a deal is referred to a lender (license number, charges, and credentials). The details of the loan (fees, loan amount, and terms) can be indicated online via a standard online application form. As for the client’s personal data, all you have to provide is your ID card or your driving license number. In case of any troubles with filling the application form, you can contact online consultants; however, most customers do not experience difficulties as the application procedure is very brief and timesaving. Obviously, you will also need to specify the bank account number on which the lender would send the money. The money transfer is accomplished in a 24-hour period after the deal is accomplished.