California Payday Loan Rules: The $300 Cap, the 15% Fee, and What Lenders Cannot Do (2026)

California allows payday lending and regulates it under one short law, the California Deferred Deposit Transaction Law, which is Division 10 of the Financial Code. The rules have not changed in substance since the law took effect in 2003, which makes them easy to state and easy to check. The state regulator, the Department of Financial Protection and Innovation, the DFPI, licenses the lenders, publishes an annual report on what they did, and takes complaints. This guide covers each rule, what it costs in dollars, what the 2024 report says about who borrows, and how to check a license. For how California compares with every other state, see our payday loan laws by state guide.

What California calls a payday loan

The statute never says “payday loan.” The product is a deferred deposit transaction: you write the lender a personal check for the amount you receive plus the fee, and the lender agrees in writing to hold it until a date up to 31 days out. The lender is a deferred deposit originator, licensed by the DFPI. Banks and credit unions are exempt from the licensing law, and the definitions section says the law is built around a personal check, though the DFPI’s data shows most funds now move electronically. Every rule below applies to a licensed originator, which is why the license check at the end matters.

The rules, in one table

The following come from Financial Code sections 23035, 23036, and 23037, read on September 21, 2026.

Rule	California limit
Maximum check	$300, including the fee
Fee cap	15% of the face amount of the check
Term	Up to 31 days
Loans at a time	One per lender; a lender cannot open a new loan while its earlier agreement with you is in effect
Extending the due date	Allowed, but the lender may not charge any additional fee or charge for an extension or payment plan
Rollover with a new fee	Not allowed; the lender cannot reuse your check for a new transaction or let you pay off one loan with another loan
Returned check	One fee of up to $15, and that is the exclusive charge; no late fee may be added
Collateral	Prohibited
Tie-ins	The loan cannot be made contingent on buying insurance or any other product
Criminal charges	Prohibited; the lender must state in the agreement that you cannot be prosecuted or threatened with prosecution

Two things the table implies. First, because the $300 cap includes the fee, the most you can actually receive is $255. Second, the fee is a share of the check, not an interest rate, so the cost of one loan is the same whether it runs 7 days or 31.

What the maximum loan costs

Take the maximum $300 check for the common two-week term:

	Amount
Face amount of the check	$300
Fee at 15%	$45
Cash you receive	$255
Due on the date the check is held to	$300
Fee as a share of what you received	About 17.6%
Annualized over 14 days	About 460% APR
Annualized over 31 days	About 208% APR

The APR is calculated on the $255 you received, which is how the federal Truth in Lending disclosure in your agreement will state it. The DFPI’s own consumer advisory describes the typical two-week loan as working out to “more than 400 percent,” and its 2024 report puts the statewide average at 364% APR with an average term of 17 days. The APR falls as the term lengthens because the fee does not change, so if the lender offers a choice of due dates, the later one inside the 31-day limit costs nothing extra. The payday cost calculator on our payday loans page lets you run your own amount and term.

If you cannot pay on the due date

California does not require an extended payment plan the way Florida and about a dozen other states do. What it does is remove the lender’s incentive to refuse one: section 23036(b) lets a lender grant an extension of time or a payment plan, but bars it from charging any additional fee or charge of any kind for doing so, and section 23037 bars the lender from taking a new check or applying the proceeds of a new loan to the old one. So the “roll it over for another $45” offer that drives the payday loan cycle elsewhere is not legal in California. What a lender can do if you do not pay is deposit the check, charge one returned-check fee of up to $15 if it bounces, and pursue the debt civilly.

Three steps if the due date is coming and the money is not:

1. Ask for the extension or a payment plan in writing before the due date. The lender is not required to say yes, but it cannot charge you if it does, and the written agreement must record any plan under section 23035(e)(6). Keep a copy.
2. Do not let the check or debit bounce without warning. If you gave an electronic authorization, the CFPB’s page on stopping a payday lender from taking money out of your account covers revoking it; that stops the debit, not the debt.
3. Talk to a nonprofit credit counselor. The NFCC agency finder locates a member agency, and an initial session costs nothing.

If the loan has already gone unpaid, what happens if you default on a payday loan walks through the civil process, and our extended payment plans guide compares the state rules.

What a California lender must tell you

Section 23035 requires two sets of disclosures. Before the transaction, the lender must give you a notice covering its charges, the $15 returned-check fee, the fact that you cannot be prosecuted or threatened with prosecution over the check, the DFPI’s telephone number for complaints, and that it cannot take collateral. In every store, a posted schedule must show the fee, the check amount, and the APR for at least a $100 and a $200 loan at 14 and 30 days. The signed agreement itself must state the total fee in dollars and as an APR, your payment obligations, the due date, any returned-check charge, and the same no-prosecution and no-collateral statements, in at least 10-point type and in the language the deal was negotiated in. An agreement cannot contain a wage assignment, a confession of judgment, an acceleration clause, or a hold-harmless clause.

If any of that is missing from your paperwork, the lender is out of compliance, and that is a complaint the DFPI takes.

What the state’s data shows

The DFPI’s report on 2024, published in July 2025, is the most detailed public picture of who uses these loans in California:

• 5,866,215 loans totaling $1,651,685,137, to 889,363 individual customers, from 91 licensed lenders.
• The average loan was $252 at an average APR of 364%, for an average of 17 days.
• Loans to a borrower who had already taken one made up 70.32% of all loans and 80.17% of the dollars. Of those repeat loans, 30.27% were made the same day the previous one ended, and another 17.53% within a week.
• About 26.91% of customers took ten or more loans in the year, while 23.29% took only one. Roughly three-quarters of the $246 million in fees came from customers who borrowed seven or more times.
• 32% of customers reported annual income of $30,000 or less.
• Just over half of all loans, 53.46%, were made online, and the number of customers referred to lenders by lead generators rose 45% from 2023.

The pattern is the same one the CFPB found nationally: the cost of a single loan is bounded, and the cost of a year of them is not. A lender cannot lawfully open a second loan while the first is in effect, but nothing stops a new loan the day the old one closes, and the data says that is exactly what happens for the largest share of borrowers.

Check the license, especially online

California’s rules bind licensed lenders. An online lender with no California license, including some tribal and offshore operations, may not follow any of them and may be hard to reach when something goes wrong. Two steps:

1. Search the lender’s name in the DFPI’s list of regulated entities before you sign, or call the DFPI at 1-866-275-2677.
2. If a licensed lender breaks a rule, submit a complaint to the DFPI. The DFPI regulates these lenders directly and can act on a complaint. You can also file with the Consumer Financial Protection Bureau.

Before you borrow in California

A California payday loan is small by design: $255 in hand at most, $45 in fees, and no legal way for the lender to charge you more to extend it. That containment is real, and it is why the worst single-loan outcome here is bounded in a way it is not in Texas. It is still $45 for two weeks’ use of $255, and the state’s own data shows most of the money lenders make comes from people borrowing again and again. If the gap you are covering is larger than one paycheck, payday loan alternatives that actually work covers the cheaper options, and if the real problem is a bill you cannot pay this month, what to do if you can’t make this month’s payment starts with that creditor rather than a new loan. If you have decided to proceed, payday loans explained walks through the loan from the application to the day the money comes back out.

This is general information about California law as published on the Legislature’s website and in the DFPI’s 2024 annual report, not legal or financial advice. Confirm current figures with the lender’s Truth in Lending disclosure and with the DFPI before you borrow.