Payday loans legislation in the State of California

Once a life everybody can face with the situation when urgent cash is needed to solve unexpected problems, but they have to wait for the next paycheck for pretty much time. Taking a payday loan can be a great way out of this difficult situation. On the other hand, resorting to payday loans too often may lead to the deeper financial issues, because repaying a loan is always more difficult than borrowing it. So that payday lending industry is regulated by a number of laws in the State of California. The legislation helps borrowers to avoid getting into a debt circle and stay away from unfair lending companies.

In accordance with the official legislative acts payday lending business is not banned in California. The Financial Code 23000 and the Civil Code 1789.30 are the main laws that monitor payday lending operations in the State.

In addition, the State legislation doesn’t allow any payday lender to operate on the loan market without a license. The purpose of such requirement is to guarantee maintaining of borrowers’ rights and securing them against criminal activities of some lenders.

Furthermore, borrowers and lenders are only allowed to deal with each other by concluding a detailed legal agreement. This document is required to provide data about a sum of the loan, terms of payment, financial conditions, including percentage rates and extra fees. Customers should show their ID or driving license in order to receive a loan.

In the State of California a customer is prohibited to borrow a loan which is higher than $300 at one time. The maximum term of payment is 31 days, and a payday loan should be paid back till this time. $17.65 is the maximum fee that payday lending firms are allowed to charge their clients for a fortnight loan making up $100. Lenders are also required to take not more than 15% for a loan given for 7 days. As a rule, an annual percentage rate for a $100 loan offered for 2 weeks amounts 459% in the State.

A borrower is forbidden to take more than one loan at a time and is required to pay it off until addressing for another loan. Extensions of payday loans are banned in California and a lender is breaking the law if he charges additional fees in order to roll over a loan. A new loan can’t be repaid with the old one by a borrower. Every time a borrower is applying for a payday loan, a new process is started and a new contract is concluded. A repayment plan can be provided by a lender, if a borrower needs one.

The State legislation acts prohibit payday lenders to offer new loans to the borrowers who didn’t pay back the old ones. Often it can be difficult to control customers’ activities, but they are not recommended to resort to another payday loan till repaying the current one in order not to appear in a debt circle. In case a borrower turns back a check because of non-sufficient funds, a lender isn’t allowed to charge him a collection fee exceeding $15.

If a lender purposely extends the repayment, he can’t apply extra interest to his customer. Bringing in a criminal suit against a borrower due to non-sufficient funds is forbidden by the State law. Additionally, a borrower should notify a lender about all the details and changes concerning a loan in the language, in which an agreement was signed, so that a borrower can clearly understand everything.

A great number of payday lending firms are operating on the market in California. But it is of high importance to choose a reliable and safe lender in order not to be deceived by a negligent company. Loansassist.net is a reputable and experienced payday lending company that is working in accordance with the state legislative acts and providing services of high quality. You can receive money simply and fast without facing with any problems and inconveniences by applying for our loans

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