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Capped at a $300 check — which puts $255 in your hand — over no more than 31 days, with rollovers prohibited. But check which California statute your loan is actually under.
California prohibits rolling a payday loan over — yet the state’s own data shows borrowers cycle anyway. In 2022 the DFPI reported that about 70% of payday loans went to a borrower who had already taken one that year, and 40% of those repeat loans were made the same day the previous loan ended.California · RegulatorCalifornia DFPI, Annual Report of Payday Lending Activity under the Deferred Deposit Transaction Law (2022): about 70% of payday loans were made to a borrower who had already taken one that year, and 40% of those repeat-borrower loans were made the same day the previous transaction ended. A fresh loan the same day the last one closes is a rollover in everything but name.
California Deferred Deposit Transaction Law — Fin. Code §§ 23000–23106
The Department of Financial Protection and Innovation sets it out plainly: the consumer’s personal check cannot exceed $300, the lender may not charge a fee higher than 15 percent of the check amount, and the term cannot last longer than 31 days.California · RegulatorCalifornia DFPI — under the CDDTL the amount of the consumer's personal check cannot exceed $300; the lender cannot charge a fee higher than 15 percent of the check amount; a borrower who gives the lender a check for $300 will take home only $255 if the lender charges the maximum fee; the term of a payday loan cannot last longer than 31 days
DFPI gives the worked example itself: a $300 check returns $255 in cash. The $45 difference is the fee. On a two-week term that is roughly 460% annualised.
Rollovers are prohibited.
This matters more in California than almost anywhere. The CDDTL covers only a deferred deposit transaction of $300 or less secured by a single post-dated check, from a lender holding a DFPI licence as a deferred deposit originator.
An instalment loan above $300 is governed by a different statute entirely — the California Financing Law, Fin. Code § 22000 et seq. Different limits, different protections.
Verify the licence at dfpi.ca.gov before assuming anything on this page applies to you. If your lender is not in that database as a deferred deposit originator, it does not.
California prohibits rolling a loan over. In practice the same borrower often takes a fresh loan immediately after repaying — technically a new transaction, economically identical. Paying $45 every fortnight to keep borrowing the same $255 comes to $540 in fees over six months on a $255 principal.
DFPI licensed 109 payday lenders as of the end of 2022, and Financial Code § 23026 requires each to file an annual report on its lending.California · RegulatorDFPI Annual Report on the California Deferred Deposit Transaction Law for 2022 — Financial Code section 23026 requires licensees to file annual reports; as of December 31 2022 the DFPI licensed 109 payday lenders The Department began regulating this market in 2005.
Payday debt is a civil matter in California, not a criminal one. Any threat of arrest or criminal charges for non-payment is unlawful under state and federal law. What to do if you have been threatened →
A CDDTL lender may deposit your check, charge a one-time $15 NSF fee, send the account to collections, and sue — but only within four years of your default. They may not issue a new loan to repay the old one.
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
A payday loan is a consumer debt. If it goes unpaid, two California rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →