Are you planning to secure a loan in California? If you want to apply for a payday loan online or locally in California, then you have to know the laws pertaining to this type of loan so you know how to protect yourself from scrupulous payday lenders.
When you apply for a payday loan, you are usually required to provide the account number of your checking account or a postdated check. Simply because when the loan due comes, the payday lender will just automatically withdraw the money you owe them from your account, plus the fees associated with it or they will just cash-in the check you issued. Other way, if you fail to make deposit on the check or the funds on your account not sufficient to cover the loan amount and fees, you are going to face legal repercussions.
In accordance to the Consumers Union, lenders are very well known for charging exorbitant fees. But, if you are in California, the lender can only imposed a 15 percent maximum charge, out of the amount in fees and interest. In other words, the entire fees for the loan, including late fees must not be more than 15% of the original principal loan.
California Payday Loan Rollover
In some states, rollovers are allowed wherein the unpaid debt from last month, can be roll over to the next month. The original loan, interest fees and late penalty fees that comes with the loan, will just form into a new loan. In many cases, the loan usually roll over each month just grow in size if not stop. Hence, the California law, disallow roll over loans, because of its negative factor.
California Payday Loans Fraud Charges
There are cases when payday lender would try to file fraud cases against delinquent borrower or would use threat as a means to force borrower to pay back their debt, especially when the check issued bounced. However, since the state of California prohibits filing of criminal cases to payday loan borrower, even if a check bounced then you have nothing to worry about, as bouncing check does not constitute to fraud.Share