At Snappy Payday Loans, we connect customers in Los Angeles and other California cities to payday lenders and companies that provide cash advances. Before taking on this type of loan, make sure you understand the state laws that govern payday loans and cash advances in California and what you can expect from a reputable lender.
Understanding Cash Advances and Payday Loans
If you need cash quickly but don’t have the credit to seek traditional financing, you can get the money you need quickly from a company that specializes in cash advances. Generally, these take three common forms:
Payday loans are quick cash advances that can be used in an emergency and repaid when you receive your next paycheck. Whether you need to make skyrocketing rent in San Francisco or have unexpected car repairs or expenses, this type of financing is designed to give you a bit of breathing room.
Payday installment loans are a variation on the traditional payday loan. With an installment option, borrowers can spread out payments over four to six months. However, this type of loan is not offered in California, where the maximum repayment term for a payday loan is limited to 31 days.
Line of credit loans allow you to take cash advances when you need them and repay the amount over time. You only pay interest and fees on the amount you take out and can take additional advances up to your credit limit at any time. Although this product is similar to a standard credit card, it is available to those with poor credit and typically carries a higher interest rate.
Payday loans in California are carefully regulated. This helps protect consumers from unscrupulous agencies that don’t follow industry ethics and best practices. Payday loans are also meant only for short-term, emergency use. If you have a significant ongoing need for additional funds, you may want to seek credit counseling and work on saving an emergency fund.
How the Process Works
When you apply for our payday loans, the process is completely secure and confidential. Our 128-bit encrypted connection transmits your application to our partners without the risk of interception by third parties.
We pride ourselves on our simple, streamlined application process. Most people are approved if they meet the following requirements:
Have an active checking account in good standing
Are a permanent resident or citizen of the United States
Are age 18 or older
Have had a job for at least one month
Can supply a working phone number and email address
We process online applications 24 hours a day, seven days a week. Most borrowers have cash in hand by the following business day or even the same day. Funds are deposited directly into your bank account.
For payday loans, you repay the amount from your next paycheck. Line of credit loans have flexible repayment terms. You receive a regular billing statement and make monthly payments depending on how much of the credit line you borrow.
Our interest rates are competitive with those of other companies offering California payday loan services and adhere with state requirements as delineated below. We work only with a network of direct lenders that meet our compliance requirements.
California Payday Loan Regulations
Each state can establish its own regulations about payday loans, with some states completely outlawing this type of lending. Payday loans in California are regulated by the California Department of Corporations Financial Services Division. Lenders must be licensed by the California Department of Business Oversight.
Payday loans in California must carry a maximum loan amount of $255 and a maximum loan term of 31 days. The finance rate and fees combined may not exceed 15% of the total loan amount.
Lenders are required to provide the annual percentage rate when providing a payday loan. Most loans of this kind carry an APR over 400%. The maximum APR for a 14-day loan for $100 is 459%. The shorter the term of a payday loan, the higher the annual interest rate.
Unlike traditional loans, payday loan interest rates are not amortized. Instead of changing as the loan is repaid, these rates are charged as a flat fee on top of the cost of the loan. Most lenders charge interest based on the amount you borrow, such as $15 for every $100. If you seek a payday loan of $200, you are charged a fee of $30.
To calculate the APR based on those numbers, let’s say the repayment term is the state maximum of 31 days. Use the following equation:
The interest charge / loan principal is multiplied by 365 days, then divided by the repayment term.
For our example above, $30 divided by $200 is 0.15. When we multiply by 365, we get 54.75. Dividing that number by 31 creates an APR of 176%.
Knowing the APR of your payday loan or line of credit allows you to make an apples-to-apples comparison about affordability. This helps you make smart borrowing choices that can improve your overall financial outlook.
To obtain a payday loan, borrowers must give the lender a personal check as collateral. This check may not exceed $300 for a single payday loan, which covers the loan amount and maximum fees. Lenders may not legally accept blank checks.
California borrowers may not carry more than one outstanding payday loan simultaneously. Payday lenders are not allowed to charge a rollover fee to extend the loan. The repayment plan must be voluntary without fees charged for an allowable extension. Simply put, the lender can agree to extend the repayment term but can’t charge more money for the privilege.
This is quite different from other states, where rollover payday loans with high fees are common. The average payday loan consumer takes out 10 payday loans a year according to the Consumer Finance Protection Bureau, so those fees can quickly add up.
California payday lenders are prohibited from threatening criminal actions to collect on payday loans. The maximum fee for a payment with insufficient funds is $15.
Payday lenders must be truthful with clients and refrain from making misleading, unfair, deceptive or unlawful statements or acts. The state also has laws stating that consumers must receive the following information when they obtain a payday loan:
The APR as a percentage rate and stated as a dollar amount
The NSF charge for returned checks, not to exceed $15
The established repayment schedule and amount
The fact that failure to pay the loan will not result in prosecution or threatened prosecution
The fact that lenders cannot require borrowers to buy a product or accept collateral in exchange for a payday loan.
If a lender fails to adhere to these regulations, customers can file a complaint with the Department of Business Oversight. This can be done through an online form or by calling a toll-free number.
Active-duty military personnel and their families are governed by military rules that prohibit payday loans. Under the Military Lending Act, companies lending to these individuals must charge an APR of less than 36%, which is much lower than the average APR for cash advance loans.
If you live in San Diego, Sacramento, San Jose or any other California city, you can get a fast infusion of funds for emergencies and shortages from Snappy Payday Loans. Fill out our short application form to have the cash you need by the next business day.
Kelly is a graduate of Northwestern University's Kellogg School of Management with a Master's Degree in Finance. She began her career in the short-term lending industry in 1996. Starting with one store, she grew the business to over 50 storefronts offering payday loans. As the industry started to shift online, she changed gears and started Snappy Payday Loans, allowing consumers nationwide to apply online for a payday loan. Through relationships and time, Kelly has built a large network of lenders that offer loans that Snappy utilizes today.