Payday loans in California
When the lender holds a DFPI license, payday loans are legal in California, as the California Deferred Deposit Transaction Law sets out.
- Payday lending
- Allowed
- Max cost
- $17.65 per $100 borrowed
- Top amount
- The check itself can be written for no more than $300.
At that cap, a $100 loan over 14 days can carry $17.65 in fees: $117.65 back in total, close to 460% APR.
Are payday loans legal in California?
Payday loans are legal in California under the California Deferred Deposit Transaction Law if the lender has a state license. Your personal check is held by the lender for as many as 31 days in a deferred deposit transaction. The amount on that check must not go over $300. Fees reach a maximum of 15 percent of the check, meaning a $300 check with the full fee provides $255 in cash. With any single lender, you are limited to one loan at once, and using another loan to repay one is prohibited.
An extension or payment plan may also be granted by a lender. California law forbids them from adding any fee for these options. Also, unlicensed online lenders were ordered by the California Department of Financial Protection and Innovation to stop, and their illegal California loans were voided. Before borrowing, you may check the department list for licensed entities, or you can contact them to report lending without a license.
- The limit applies to the check, not the cash: a borrower writes a check for at most $300, so the full 15% fee leaves them with $255.
- While lenders can give more time or a payment plan, they cannot charge any fee for doing so.
- The California Supreme Court held on 22 December 2016 that two tribal-affiliated online lenders had not established arm-of-the-tribe status (Owen v. Miami Nation Enterprises).
- All illegal payday deals with Californians made by online lender Cash Cure were voided when the regulator ordered it to stop in 2013.
- The Fair Access to Credit Act, AB 539, set a cap of 36% plus the Federal Funds Rate on installment loans from $2,500 to under $10,000 starting 1 January 2020.
California payday loan laws
- Law in force
- California Deferred Deposit Transaction Law (CDDTL)
- Cited as
- Cal. Fin. Code 23000 through 23106 (fee caps and limits: 23035 through 23037)
- Fees under the law
- For a deferred deposit transaction, 15 percent of the check face amount is the maximum fee allowed.
- Most you can borrow
- The check itself can be written for no more than $300.
- How long a loan runs
- 31 days
- Rollovers
- Prohibited: a licensee cannot allow proceeds from one deferred deposit transaction to pay off another.
- Loans you can hold at once
- Just one agreement at a time: no new contract may be made while a previous one with the same customer is ongoing.
- Repayment plan
- While a licensee may grant extra time or a payment plan, charging any additional fee for this is prohibited.
- Installment lending limits
- The California Financing Law sets a 36% yearly simple interest cap, plus the Federal Funds Rate, for loans from $2,500 to under $10,000 (Fin. This rule comes from Fin. Code 22304.5 and started on 1 January 2020.
Also checked against dfpi.ca.gov. Full statute text.
Online lenders that list California
Ten companies we track say they lend in California: 2 online installment lenders, 1 store and online lender, 6 tribal lenders and 1 loan broker.
| Lender | Kind | Posted APR |
|---|---|---|
 NetCredit | Installment | 34.99% to 99.99% |
 OppLoans | Installment | 99% to 195% |
 ACE Cash Express | Store and online | 122.4% to 769.1% |
 Viva Payday Loans | Broker | Partner lenders quote 4.99% to 1,386% |
Tribal loans in California
In 2016, the Supreme Court of California decided two online payday lenders tied to tribes did not prove shared tribal immunity, and the regulator told unlicensed online lenders to stop while voiding their loans in California.
On the immunity claim tribal lenders make, see are tribal loans legal.
Six tribal lenders we track list California as a state they lend in. Three of the six publish an APR, from 73.7% to 725%.
| Lender | Posted APR |
|---|---|
 Mobiloans | 73.7% to 405% |
 Spotloan | 99% to 490% |
 BrightLending | 325% to 725% |
 MaxLend | Not published |
 Minto Money | Not published |
| American Web Loan | Not published |
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Lender cases and orders in California
- 2024 · California DFPIChime SpotMe: A consent order addressed unfair complaint handling; it imposed a $2.5 million penalty and mandated better customer service. Source
- 2021 · California DFPIChime SpotMe: The settlement said Chime's use of chimebank.com violated California banking-name rules. Chime agreed to drop it unless it becomes licensed as a bank. Source
- 2019 · California Department of Business Oversight (now DFPI)ACE Cash Express: A consent order found repeated payday-loan overcollections that violated earlier 2010 and 2015 orders, leading to a $595,000 administrative penalty Source
- 2019 · California Department of Business Oversight (now DFPI)Possible Finance: In a consent order, Possible told the regulator itself that it had made deferred deposit loans in California without the right license, which led to a desist order and a $51,500 penalty. Source
- 2015 · California Department of Business Oversight (now DFPI)ACE Cash Express: After an exam whose findings included excess collections from customers, ACE settled by paying restitution and an administrative penalty of $22,500. Source
- 2013 · California Department of Business Oversight (now DFPI)Mobiloans: After complaints, a consumer alert said Mobiloans, citing tribal status, seemed to sell payday loans in California while unlicensed by the state. Source
California and the states around it
| State | Payday lending | Max cost | Top amount |
|---|---|---|---|
| California | Allowed | $17.65 per $100 borrowed | The check itself can be written for no more than $300. |
| Arizona | Banned | None in the law | None allowed |
| Nevada | Allowed | None in the law | The customer's expected gross monthly income sets a ceiling: the loan and any other outstanding loans combined must not go over 25 percent of it. |
| Oregon | Allowed | None in the law | The payday loan definition sets a $50,000 ceiling and no other dollar limit; rules also cap lending at 25% of monthly net income when a borrower's yearly earnings are $60,000 or under. |
California loans with no credit check
Installment loan rates: The California Financing Law sets a 36% yearly simple interest cap, plus the Federal Funds Rate, for loans from $2,500 to under $10,000 (Fin. This rule comes from Fin. Code 22304.5 and started on 1 January 2020.
See no credit check loans: the checks lenders still run, and the price.
Verify a lender's license in California
- Look the lender up on the license list before you hand over any bank details.
- Lenders here answer to the California Department of Financial Protection and Innovation (DFPI).
- Had trouble with a lender? Report the lender.
Sources for California
- The check amount cannot exceed $300, and a licensee may defer it for as long as 31 days.; The face amount of the check has a cap of $300.leginfo.legislature.ca.gov
- The fee cannot go above 15% of the check face amount.; While payment plans or extensions are permitted, charging any extra fee for them is not allowed.; With the same licensee, you may have just one loan active at any time.leginfo.legislature.ca.gov
- Rollovers are prohibited: you cannot use a new loan to pay off an existing one.leginfo.legislature.ca.gov
- The DFPI notes a $300 limit on checks and a 15% fee.; Per DFPI, the term is up to 31 days, and the borrower nets $255 from a $300 check at maximum fee.dfpi.ca.gov
- A cap of 36% plus the Federal Funds Rate applies to installment loans ranging from $2,500 to under $10,000.leginfo.legislature.ca.gov
- On 1 January 2020, the Fair Access to Credit Act went into effect.dfpi.ca.gov
- On 22 December 2016, the California Supreme Court found that tribal-affiliated lenders did not prove arm-of-the-tribe immunity.; The California Supreme Court decided Owen v. Miami Nation Enterprises on December 22, 2016.law.justia.com
- The regulator told online lender Cash Cure in November 2013 to stop making payday loans in California.; That 2013 action against online lender Cash Cure canceled all of its illegal California deals.dfpi.ca.gov
- You can use the DFPI list to find licensed entities.dfpi.ca.gov
- Complaints are taken by the DFPI, including those concerning unlicensed activity.dfpi.ca.gov