According to the payday loans legislation in California the legally registered California direct payday loan lenders are allowed to issue no more than $300 within payday loan contracts. To protect potential customers from handcuffing repayment terms, the state of California doesn’t allow setting the minimum loan length, while the maximum term for the contract is 31 days. The current legislation allows charging the customers 17.65% fees, but the maximum amount to be paid by the borrowers must not exceed 15% of the total loan sum per week. Therefore, an average fee per one hundred dollar within a 2 weeks payday loan equals $17.65.
According to California payday loans laws, the APR as for the interest rate varies from 440 to 460%. The lending agency is required to provide a comprehensive set of legal documents written in plain language. The information on lending terms, including the total loan sum, clear terms and conditions (indicated in a separate chapter/document), rates, fees and charges must be provided before the contract is signed.
The state of California has advanced customer protection legislation in place as for the payday loans, so lending companies have to comply with the following guidelines and limits. The lending agency can issue one loan to a single borrower (without any time limits). However, the rollover loans are forbidden in California. Therefore, the customer must complete the repayment to the full extent before submitting an application for another loan. In addition, rollover charges are considered to be illegal.
The repayment terms are also subjected to tough legislation: to protect borrowers from financial cabbala it is not allowed to use the borrowed money to repay the active loan; submitting a request for another loan to cover the active one is also prohibited. In addition, the state requires lending ages to provide prolongation contracts to borrowers (without draconian fees and repayments).
The state has a set of payday loan regulations as for collection practices, containing a number of restrictions. Therefore, the following caps and restrictions are practiced: the maximum of $15 can be charged in case of check return. The lending enterprise is not empowered to initiate criminal proceedings in case the necessary sum was not returned by the agreed deadline.
The state has created the DBO committee – the legal body to investigate the cases where the violations of the laws, rules and guidelines take place. The committee deals with both online and offline companies, offering both online and offline interactions: thus, you can file a complaint or get in touch with the reps at dbo.ca.gov.
The borrowers in their turn are expected to make use of the provided information on laws about payday loans in California, as well as information on safe borrowing wisely. Make your choice in favor of reliable, reputed agencies, but more importantly, sign the contracts only once you’ve got acquainted with all the terms and all of the seem to be clear. Use payday loans as short terms solutions to your temporary problems and consider other options if you are looking for long-term financial assistance.