Personal Loans in California: What Licensed Lenders May Charge

How the California rate limits work

The California Financing Law (Financial Code Division 9) sets a different ceiling for each loan size, measured by the bona fide principal amount. The three ranges below cover a typical personal installment loan from a licensed finance lender.

The federal funds rate in Section 22304.5 is the one the Federal Reserve publishes in its H.15 release, as of the first day of the month before the loan is made. The H.15 release of October 26, 2026 showed an effective federal funds rate of 3.88%, which would put the cap near 39.88%. Section 22305 allows an administrative fee on top of the rate: up to 5% of the principal or $50, whichever is less, on loans up to $2,500, and up to $75 on larger loans. Only one fee may be charged until the loan is paid off.

Why a $2,000 loan can cost less than a $3,000 loan

The bands under $2,500 are much tighter than the cap above it. The National Consumer Law Center, which compares state caps, puts the most a licensed lender may charge on a $2,000 two-year loan at about 25% APR, fees included. Cross $2,500 and the ceiling jumps to 36% plus the federal funds rate. At $10,000 the numeric cap disappears, and the NCLC lists California as having no cap except an unconscionability standard for a $10,000 five-year loan.

If a lender suggests borrowing a little more than you need, check whether the larger amount moves the loan into a higher-cap range. The loan term calculator shows what the payment and total cost look like at each amount.

Who needs a license and who does not

A business that makes consumer loans in California as a finance lender needs a California Financing Law license from the DFPI. Lenders licensed under the law must follow its rate, fee and disclosure rules for the loan sizes they cover. For loans of $2,500 to $9,999 at the 22304.5 cap, the lender must also report each borrower's payments to at least one nationwide credit bureau and offer a free credit education program before funding the loan; you cannot be required to take it.

• Banks and credit unions answer to their own charters and banking regulators instead, and a bank may charge the rates its home state allows.
• Online lenders that partner with a bank may make loans through that bank, which can put the loan outside the California caps. Ask who the lender of record is.
• Payday loans follow separate California rules. Our sister site Lendmira covers them on its California lending laws page.

How California compares with its neighbors

On the National Consumer Law Center's comparison of a $2,000 two-year loan from a licensed non-bank lender, California's 25% is lower than Oregon's 36%, Nevada's about 40% and Arizona's about 41%. For a $10,000 five-year loan, Oregon caps the APR at 36% and Arizona at about 30%, while California has no numeric cap at that size. The state rules map shows every state side by side.

Check a lender and file a complaint

1. 1 Look up the license with the DFPI's Search Regulated Entities tool on dfpi.ca.gov, or in NMLS Consumer Access, before you apply.
2. 2 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees.
3. 3 File a complaint with the DFPI online, by mail to Consumer Services, 2101 Arena Boulevard, Sacramento, CA 95834, or call 1-866-275-2677 for help with the form.
4. 4 Send a complaint to the CFPB as well if the lender is a bank or a bank partner; complaints about national banks go to the Office of the Comptroller of the Currency.

Questions people ask