In this present economic situation, many people are finding it difficult to access money to take care of unexpected emergencies. Payday loans are trusted to get rid of financial emergencies. These loans are a great option and in 2020, California payday loan providers granted 6.1 million payday loans to people and this was about $1.6 billion.
Whether you need an online or storefront payday loan in California, you must understand the rates, rules, and limitations that govern it. Do you want to know the terms and conditions? Read on!
Are Payday Loans Accepted In California?
Yes, payday loans are accepted in California. The state is one of the 26 states in the United States that encourages payday loans. However, the state doesn’t permit a lender to give you a payday loan if you have an existing one or intend to pay off your debt with it.
If you are skeptical about the authenticity of the lender, you can request to see the lender’s license as well as the schedule of fees. In California, payday lenders are expected to display their license and schedule of fees. If they don’t, you can go online and verify the license.
Requirements To Get An Online Payday Loan In California
If you want to get an online payday loan in California, ensure you have these in place:
- A credit union account, bank, or prepaid card
- A reliable source of income
- Attained eighteen years old with a government-issued ID
- Contact details such as your email and contact address
- In some cases, some lenders would require that you also provide your social security number, credit score, and any other information that interests them.
How Does the Payday Loan In California Work?
The common ways of getting a payday loan in California are online and storefront. The application process is usually for a few minutes. As soon as the lender approves the loan, you can give a post-dated cheque to the lender. But, this is only necessary when you are at the storefront. Alternatively, you can help the loan amount deducted directly from your bank account on your next payday. Fortunately, the lender wouldn’t deduct money from your loan account until the end of the loan term.
The lender makes the money available to you but deducts the lender’s fees. Interestingly, you can also receive the money in cash if you’re at a physical store. But, if you apply online, the money will be transferred to your bank account. You can receive the money the same day or during the next business day.
On your next payday, the lender takes the money from your account. But, you can also decide to repay the loan in full before the end of the loan term. In California, the loan terms do not exceed 31 days.
What Happens If I Can’t Repay My Loan?
If you are having challenges in repaying your loan, you will incur additional charges. It is also important to note that if the money in your account is insufficient, you will get an overdraft. California payday lenders are at the liberty of charging about $15 for a bounced check.
Some lenders make it easy for borrowers by offering an extended payment time so that they don’t incur additional charges. This isn’t a legal requirement in California but there are about 40% of lenders in the state that provide this option to borrowers.
What Is The Maximum Payday Loan In California?
California restricts the amount that borrowers can get to $300 and lender’s fees are 15% of the loan amount. To this effect, if you borrow $300 and your lender includes the maximum fee of $45, the highest loan amount you can get in California is $225.
Ensure you stay away from lenders in California that offer more than this amount. They could be fraudulent individuals.
What Are The Chances Of Getting a Payday Loan with a Credit Score?
You can get a payday loan even with a bad credit score as the payday lenders do not run credit checks before approving a loan. However, if you default in paying your loan, the payday lender can send it to a collections agency and this can impact your credit.
It is pertinent you understand that payday loans are not instrumental in building credits because credit bureaus are not aware of your payments. Therefore, if you desire to build your credits, you could consider other alternatives.
Important Tips For Payday Loan Borrowers In California
Payday loans are helpful because they give you access to fast loans to settle your pressing need. The money may be all that is required to get you out of an unfavorable situation. Just ensure you choose an option that is best for the situation. It is also important that you work with reliable lenders. The helpful tips will help you make your decision:
- Don’t be too dependent on Payday loans. California Department of Financial Protection and Innovation notes that overusing payday loans can increase your cycle of debt. Only settle for what you know you can pay back.
- Exercise your rights. Know when lenders are trying to take advantage of you and be familiar with the California Payday Loan laws as this will help you identify and report fraudulent lenders.
- Only work with a licensed payday loan provider in California.
Is It A Good Idea To Obtain A Payday Loan in California?
Whenever you need cash to take care of financial emergencies, you can get it using a payday loan. This is a legitimate short-term loan that can help you cover some of your immediate needs. In California, there are some rules in place to protect you from incurring debt by overusing payday loans. Apply for your online payday loans in California through JohnThomasFinancial. We’ll ensure you get the best payday lender in California.