Payday loans in California

Are payday loans legal in California?

Payday loans are legal in California. A licensed lender may lend up to $255 and charge no more than 15% of the check amount.

The governing law is Cal. Fin. Code §§ 23000 to 23106. California Department of Financial Protection and Innovation licenses lenders and takes complaints. Check a lender’s license there before you share bank details; how to tell if a lender is legitimate lists the other checks.

Loan limits in California

• Loan size: up to $255 (a $300 check, less the fee)
• Loan term: No more than 31 days
• Loans at one time: A licensee shall not enter into an agreement for a deferred deposit transaction with a customer during the period of time that an earlier written agreement for a…
• Rollovers: Not allowed
• Repayment plan: A licensee may allow an extension of time, or a payment plan, for repayment of an existing deferred deposit transaction but may not charge any additional fee or charge…

What a payday loan costs in California

State law sets the price rule: 15% of the check amount.

Federal law requires the lender to state the finance charge in dollars and the APR in your agreement. Read both before you sign, and set them beside the example further down this page.

A loan that meets the Northlight standard

Northlight works only with loans that carry an APR of 35.99% or less, fees included, and give you at least 3 months to repay. A single-payment payday loan under California law does not meet that standard, whatever its fee, because it falls due in one payment within weeks.

For example, $1,000 repaid over 12 months at 35.99% APR is 12 payments of $100.46, or $1,205.52 in total. The calculator prices other amounts and terms.

If you cannot repay a loan in California

Contact the lender before the due date and ask for a payment plan in writing. The state rule: A licensee may allow an extension of time, or a payment plan, for repayment of an existing deferred deposit transaction but may not charge any additional fee or charge…. On criminal threats: The customer cannot be prosecuted in a criminal action in conjunction with a deferred deposit transaction for a returned check or be threatened with prosecution. If a lender or collector breaks the rules, file a complaint with California Department of Financial Protection and Innovation and with the CFPB. Our guide to what happens if you don’t pay covers each step.

Lower-cost options in California

• Credit union payday alternative loans (PALs): $200 to $2,000 at no more than 28% APR.
• A payment plan with the landlord, utility or hospital you owe often costs nothing.
• Local assistance: dial 211 for rent, utility and food programs near you.

See all payday loan alternatives.