If you are considering getting a payday loan, then you should definitely research the subject before making any serious commitments. However, many states have different laws concerning payday loans, so it might be pretty difficult to find the information that you need. If you live in California, here is an overview of everything that you need to know about getting a payday loan.
Upper Limits on Loans
There are three main things that you need to know about the limits on payday loans:
- You cannot get a loan that is larger than $300.
- You cannot be charged an interest rate that is higher than 15%.
- You cannot get more than one payday loan from a single lender at any given time.
So what does this ultimately mean for you?
If you need more than $300, you will need to find another option for getting money. On top of that, you can expect to spend $15 at the most for every $100 that you take out. However, that only applies if you pay back your loan on time. If you cannot pay back the loan on time, you can still usually pay the interest to roll over the loan to the next payday. In simple terms, this means that you will be paying twice the interest in exchange for an extension.
Responsibly Using Payday Loans
Payday loans have high-interest rates, but they can serve a very valuable purpose. If you need a small amount of money to survive until the next payday, then a payday loan can be absolutely invaluable. However, you need to make sure that you are properly prepared before you ever step foot in a payday loan establishment.
You will need to plan out the exact amount you need. Try not to take any more than you need, even though it might be tempting. If you are unable to pay back your loan due to the extra money that you took out, then you could end up in an even worse position for your next payday.
You should also verify that the lender is a licensed institution. They should have their license at their physical storefront and they should be listed on the California Department of Business Oversight website.
On one hand, payday loans (go to websites like this for more information) do have the potential to cost you a lot of money if you fail to pay them back on time. However, if you use them responsibly, then you can use them as an incredibly valuable tool.