Payday loan rules In San Francisco - Payday Advance Credit ™ USA
Most people when trying to manage their worsening economic situation look to Payday Loans as a last resort. These kinds of loans can be used for handling unforeseen expenses and emergencies. Most borrowers usually turn a blind eye to several important facts which they must consider while applying for payday loans in San Francisco. Mentioned below are certain factors which are important for all the borrowers in San Francisco California while applying for a payday loan.
To conduct their business in the city of San Francisco California the lender should have a license issued from the DBO - Department of Business Oversight, California. The borrowers must only apply through a licensed lender. When you as a borrower do business with an unlicensed lender operating through the internet or online, you fail to get the protections and benefits from the state payday lending laws. Some of these protections are in the form of limits imposed on the loan amounts, the amount of fee that the lender can charge the borrower and a condition that the lender has to provide all the loan related information to the borrower.
How does a payday loan work?
These loan types are legally referred as deferred deposit transactions, in this loan type the consumer provides the lender (also referred as the originator) with a personal cheque for a certain amount. The lender then provides the borrower with the sum after deducting a certain fee amount agreed upon mutually. The lender then deposits the cheque provided by the borrower after a certain time period usually after completion of the loan period.
The maximum sum for which the consumer has to give a personal cheque cannot be above $300. The lender can rightfully ask for a maximum fee of 15% of the cheque amount provided by the consumer. So you have to multiply the amount mentioned in your personal cheque with 0.15 to get the maximum fee amount. For instance when you provide a $300 cheque you would only be able to borrow $255 if the lender charges the maximum 15% fee. 15% of $300 amount will be $45 so in order to determine the amount that you would receive you subtract $45 from the amount in your personal cheque which comes out to be $255.
The lenders have to inform the borrowers about the loan fee in terms of APR or the Annual Percentage Rate. For the normal payday loans, this APR usually comes to be more than 400%. The maximum loan duration for payday loans in San Francisco cannot be more than 31 days. The lenders have complete freedom to provide extensions to the borrowers for repaying the loan and they are not permitted to ask for any additional fee for the same. However the lender can charge a maximum fee of $15 if the cheque from the consumer is not honoured and returned by the bank.
The lender has to provide the following information to the borrower -