California Payday Loans Online

Payday loans give you quick access to cash if an unexpected loss comes up. These loans can be a good option in the right situation, and in 2020, California lenders provided 6.1 million payday loans, totaling over $1.6 billion. Whether you’re looking for California payday loans online or at a storefront, you should consider their rules, rates, and limitations.

Here’s everything you need to know about California payday loans.

Does California Allow Payday Loans?

Yes, California is one of 26 states that allows payday loans. But your lender isn’t allowed to give you a new payday loan if you already have one or if you want to use it to pay off an existing payday loan.

If you’re wondering if you can trust your lender, ask to see their lender’s license and schedule of fees. California payday lenders are legally required to have these on display. If not, you can verify their license online.

What Do You Need for a Payday Loan in California?

In general, to get a payday loan in California, you need:

  • Either a bank, credit union, or prepaid card account
  • A verifiable income source
  • Valid, government-issued identification, and be 18 years or older
  • Valid contact details like email and phone number

Some lenders might also ask for your credit score, Social Security Number, or other pieces of information.

How Do California Payday Loans Work?

You can get a California payday loan either online or at a storefront. The application process should only take a few minutes. Once you’re approved, you either give the lender a post-dated personal check for the loan amount (if you’re at a storefront) or allow the funds to be directly taken out of your account on your next payday. Don’t worry, the lender won’t deposit the check or deduct anything from your account until the end of the loan term.

The lender then gives you the money, minus their lender’s fee. If you’re at a physical store, you have the option of receiving the loan amount in cash. If applying online, the funds are transferred directly to your bank account. Depending on your bank, the transfer can happen instantly or within the next business day.

The lender collects the money from your account on your next payday, or you can repay the loan in full beforehand. In California, a payday loan can’t have a longer repayment term than 31 days.

What If I Can’t Repay My Loan?

If you can’t repay your payday loan on time, your lender may charge an additional fee. Be aware that you might have to pay an overdraft fee if there are insufficient funds in your account when the check is deposited. In California, payday lenders are allowed to charge up to $15 for a bounced check.

To avoid this, some lenders offer an extended payment plan that allows borrowers to repay outstanding payday loans in installments without any additional charges. This isn’t legally required in California, but about 40% of lenders provide this option.

What’s the Maximum Payday Loan Amount in California?

California limits the amount you can borrow to $300 and caps lender fees to 15% of the check amount ($45 maximum). That means if you borrow the full $300, and your lender charges the maximum fee, the most you can receive with a payday loan in California is $255.

Avoid lenders in California that promise any more than this in payday loans as it’s not legal and they could be scammers.

Can I Get a Payday Loan With Bad Credit?

Yes, you can get a payday loan in California with a low credit score. Payday lenders don’t usually run hard credit checks before approving a loan. So, it won’t hurt your credit score to apply. But if you end up with an overdue balance, your lender might send it to a collections agency, which can hurt your credit.

Note that payday loans aren’t good credit builders because your payments aren’t reported to the major credit bureaus. If you’re looking to build up your credit score while repaying your loan, then other loan options might work better, such as a secured credit card.

Tips for Payday Loan Borrowers in California

Payday loans are convenient because they give you quick and easy access to small amounts of money. That cash might be just what you need to get out of an emergency situation. But you want to make sure they’re the best option for your situation and that you’re working with legitimate lenders. Here are some tips to help you decide:

  • Avoid overusing payday loans. Payday loans are meant to be a short-term solution. The California Department of Financial Protection and Innovation warns that payday loans lead to a cycle of debt. So, try to only borrow what you can pay back.
  • Know your rights. Lenders might charge an interest rate higher than the legal limit or offer you a new loan to repay your old one. Review California’s payday loan laws and report any fraudulent activity.
  • Protect your personal information. Before you take out a loan, check the lender’s privacy policy to make sure they don’t sell your financial information to a third party.
  • Work with a direct lender that’s licensed in California. It’s harder to dispute lost funds if your lender is in another state or country.

Should I Get a Payday Loan in California?

If you need cash fast, you can easily get it with a payday loan. These loans are a legitimate option for those needing a convenient, short-term loan to cover an emergency. California also places restrictions on payday loans to help ensure these loans don’t start a cycle of debt for you. Apply for an online payday loan today with Payday Depot. We’ll match you up with the best payday loan lender for your needs.