A payday loan is a small, short term unsecured loan usually used in emergencies. They are referred to as payday loans, payday advance or cash advance loans because they are usually paid back within a month – typically by your next paycheck.
Well, it’s up to you! As we said, payday loans are best for when you’re struggling to reach your next payday. California has pretty strict regulations on payday loans, so you can only borrow up to $300. However, that $300 could help you with a car payment, bills, or rent!
California State rules on payday loans
|Interest Rate (APR)||460%*|
|Maximum Loan Amount||$300|
|Minimum Loan Term||Not Specified|
|Maximum Loan Term||31 days|
|Number of Rollovers Allowed||0|
|Finance Charges||15% of the amount advanced|
The state of California has set a $300 limit on all lenders for payday/cash advance loans, and must be repaid within 31 days of the loan being issued. For each $100 borrowed, the most the lender is allowed to charge is $15, so you repay $115 for a $100 loan. If you need an extension to repay the loan, the lender is not allowed to charge you any extra but this may show on your credit file and they cannot roll it over into a new loan.
The state rules in California protect you from any high charges on payday loans. However, if you do have problems repaying the loan on time, this can affect your credit file.
Before you take out a payday loan in California, always make sure you need it and that you can afford to repay the loan on the date you agree with the lender. You can learn more about payday loans here!