Payday Loan Limit May Be Raised to $500 in California

It has been reported that a bill is pending in the State of California that will raise the payday loan limit from $300 to $500. According to Assemblyman Charles Calderon (D-Whittier), the bill will help families more successfully weather the current recession, as traditional bank loans are becoming more and more difficult to attain for many Californians.

Payday loans are basically cash advances against a consumer’s next paycheck and available with a fee attached. For instance, a payday lender will loan $300 with a $45 dollar fee (fee amounts can vary per lender) as a part of the deal. Once a payday loan applicant is approved, instant cash is granted and can be used as needed.

While many consumers are weary about non-traditional loans in the form of payday loans, car title loans, and loans, industry rates are becoming more competitive as millions of Americans are utilizing them at an increasing rate. The most common reasons for consumers to obtain payday loans include medical/dental costs, education related expenses, auto and home repairs, and other unexpected expenses.

In order for a consumer to gain approval for a payday loan, they must possess a job, bank account, and legitimate ID. The application process can take just minutes and loans must be repaid at the next pay period. The money is obtained via an electronic bank transfer set up at the time of loan approval.

It is not yet known when exactly the bill will be voted on by the California senate; however, a decision is expected in the very near future. Opponents of the bill are worried that it will encourage consumers to take on more debt than they can handle, while proponents argue that individuals and families need the option for added financial security during a difficult month. Regardless, $300 payday loans are available throughout California for those who need them most.

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