How Many Payday Loans Can You Have In California

Last updated on October 14th, 2023 at 12:11 am

Hey, I’m Randy. I like to educate people about the good and bad of payday loans. The industry of payday loans is worth $40 billion. So, there are plenty of good and bad things to learn about this industry.

If you live in California, getting a payday loan may be one option for you to meet your immediate cash demands. Payday loan providers provide you with money before your next paycheck arrives. You must pay a fee to use these loan services.

How many payday loans can you have in California, that is the question at hand. Today we are going to look at the fees, regulations, and the number of payday loans you can have in California. So sit back and relax, and let’s get into it!

California Payday Loans: The Answer Is Revealed

Payday loans are expensive, short-term loans. The borrower must write a post-dated check for the entire loan amount. The check must be returned on time. Otherwise, the money will be withdrawn from their bank account up to 31 days after their next payday. For instance, a borrower receives cash for $255, makes a $300 check, and pays a $45 fee.

How many payday loans can you have in California?

One active payday loan at a time.

California payday loans are only allowed to charge a most of 15% interest on past-due balances. But the initial costs can amount to 500% in interest.

Fees For Payday Loans In California

According to California law, a consumer may borrow no more than $300 in a payday loan.

The most a payday lender may charge is 15% of the check’s value or a maximum of $45. Military service members and their dependents are subject to extra fee limitations.

A two-week loan with a 15% fee has an annual percentage rate (APR) of 460%. APRs on new car loans, in contrast, range from 4% to 7%. The APR, which a borrower pays on a loan, is the sum of the annual interest payments and any other costs or fees. APR is used to show how much borrowing money will cost.

Payday Loan Regulation On How Many Loans You Can Have In California

California still permits a regulated kind of payday lending. Some states do not allow any kind of payday lending. But, the payday lending status in California is legal. Lenders can provide a loan of up to $300 for a term of up to 31 days using California payday loans. 

A borrower may only have one active payday loan at a given moment. California payday loans’ largest interest charge is 15% for past-due balances. The initial costs can be as high as roughly 500%.

The Consumer Financial Protection Bureau (CFPB) protects borrowers of payday loans. It is a government agency in charge of overseeing financial institutions. The agency announced it intended to review Obama-era payday loan requirements. As part of the requirements, lenders were to ensure borrowers could repay their loans. Payday loans, in particular, have become an issue of debate.

How California Laws Protect You

Increasing evidence shows that payday loans lock consumers into a cycle of debt. Most states’ payday loan laws still permit the industry to exist.

Payday loans are still legal in about two-thirds of the country, including California. All payday lenders operating in California must have a license. The license is from the Department of Financial Protection and Innovation (DFPI). Whether they operate online or have a physical store, they must have a license. For further information, go to the department’s website at www.dfpi.ca.gov.

There are a few laws put in place to protect borrowers. Every establishment of a payday lender must display a list of its fees and its license. A single loan is available to a customer by a payday lender at a time. The largest fee is only 15% of the check’s total value, which is up to $45. For military duty, extra costs apply.

The payday lender may impose a single (up to $15) bounced check fee if your check is returned unpaid.

Be warned that insufficient funds may result in extra costs from your bank. If you ask for a more time or payment plan extra costs may not apply. The payday lender is not compelled by law to follow your request.

There are other small things that are a part of payday loan laws. You must receive the payday loan agreement in the language you use most.

Alternatives to California Payday Loans

There are still better options available to you if you’ve tried and are unable to get a loan. This is either through your bank or credit union in California. For a little loan, ask your relatives and friends for help. Discuss a promotion with your boss.

Cash advances may be available via your credit card company. While they have high-interest rates, they are not as high as those charged by payday lenders. Payday loans offer one advantage over cash advances. Cash advances are heavily regulated. All in all, take care since cash advances may put you in debt as payday loans sometimes.

In California, Are Tribal Lenders Allowed?

Tribes of Native Americans have tribal immunity, and most are exempt from state laws. This is because they are sovereign nations within the United States. Native American tribes and tribal lenders work to try to take advantage of this privilege. They do this by charging fees and interest rates over what the law allows.

Tribal lenders are permitted in that state if they meet to answer a few questions. Does a tribe’s immunity extend to its lenders as well? Does tribal immunity give people the freedom to disregard state lending regulations?

The California Supreme Court has a decision that prohibits tribal lenders. But, still a lot of tribal lenders still support loans in the state.

Final Thoughts: How Many Payday Loans Can You Have In California

Payday loans are more likely to make your financial situation worse than better. That is if you’re already having trouble making ends meet. It is challenging to keep up with them, especially if money is already tight. This is because of their high costs and short repayment timeframes.

In California let payday lenders charge interest rates well into the triple digits. This makes them as harmful there as they are everywhere. If you can avoid it, you shouldn’t get a payday loan there if possible.

If you want to save money, increase your income and decrease your spending. Do this until there is a comfortable difference between the two. Contact Ready Payday Loans, a loan connection service right away if you need help. You’ll be able to escape the debt trap created by your payday lenders. It’s Randy again, and I hope the information in this article has been useful.

Until next time.

-Randy