California Payday Loan Laws and Legislation

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Sometimes one may happen to appear in the situation when money is required for something really urgent and a paycheck is still a long time to expect. One of the most convenient ways to solve the problem is to take a payday loan. However it is frequently fraught with more financial difficulties as it is easier to borrow than to repay. That is why in California payday lending is monitored by the state law in order to keep people out of vicious circle of lending from unscrupulous companies.

According to the state law of California payday lending is legal and all the regulations concerning it are written in the following two documents - the Civil Code 1789.30 and the Financial Code 23000.

Also, the state law requires that all the lending companies should have a license in order to operate in the state. Such measure was taken especially with the aim of taking care of the customers' rights and protecting them from fraudulent actions.

Moreover, it is also required that all the transactions between a lender and a borrower must be indicated in a legal contract in detail. This agreement should contain the information about the loan amount, terms and conditions, such as interest rates and finance charges. Consumers, in their turn, are required to provide their ID card- or driving license number.

In California a person is allowed to take not more than $300 at a time. It is also presupposed that the loan should be returned in due time and the maximum term is 31 days. California payday loans should not be charged more than $17.65 for a $100 loan given for 14 days. It is also prohibited to charge more than 15 percent a week on such loans. Generally, APR for $100 on a two-week loan is 459%.

One person is allowed to take one payday loan at a time and should repay it is full before taking another one. Rollovers are not allowed and all the charges for extension are considered illegal. Borrowers are also prohibited to take one loan in order to repay for another one. Every time the loan is applied the new procedure is initiated and new agreement signed. In case a borrower needs a repayment plan it can be proposed.

Lenders in California are strictly prohibited to give extra loans to customers who haven't repaid the previous ones. It is pretty difficult to monitor the actions of a borrower but it is not advised to take out new loan before the old one is not yet resolved as long as it is fraught with never ending indebtedness. The collection fee for the return of the check due to insufficient funds should not be more than $15 (this fee is also called NSF fee).

According to the law, additional interest is not allowed, if a lender willingly agrees to prolong the payment. In case of the check return due to insufficient funds, a lender is also not allowed to take any criminal action against the borrower. It is also required by the law that the note from a lender should be written in the same language as the agreement for a borrower to understand it well.

In California there are a lot of payday lending companies that offer their services. However, it is important to find the most responsible and reliable company in order not to get into trouble with dishonest lenders. Loansdale.com is a decent and professional lending company that operates under the laws of the state and is ready to offer its prompt and qualified services. Easy and quick access to the cash you may need will be provided in no time and without any problems.

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