Borrowing $200–$5,000 in California
California caps the mid-sized loans most borrowers want. Since 2020, the Fair Access to Credit Act limits loans of $2,500 to $9,999 made under the California Financing Law to 36% plus the federal funds rate, about 40% at today's 3.75%–4.00% range, with a minimum 12-month term and no prepayment penalty. Loans under $2,500 fall under older tiered caps that work out to roughly 12%–30% APR, which is why many online lenders set a $2,500 minimum in California.
Payday loans are legal but tiny: a maximum of $300 including the fee, 31 days, and a fee of up to 15% of the face amount, which the DFPI reports works out to an APR of roughly 460% on a two-week loan. For $200–$5,000 the practical order is a California credit union, then a national online lender, then a licensed finance lender.
The national picture for context: the average bank personal loan rate was 11.90% in August 2026 (Federal Reserve G.19), credit cards averaged 22.36%, and federal credit unions are capped at 18% everywhere. State law matters most at the small end, where it decides whether a $500 loan costs $8 or $75 for a month.
What you can borrow in California, by amount
| Amount | Where California borrowers can get it | Note |
|---|---|---|
| $200 – $500 | Credit-union small-dollar loan or PAL; earned-wage access; a card | A $255 payday loan costs $45 for two weeks |
| $500 – $2,500 | Credit unions; Upgrade, Upstart and Happen Bank (from $1,000) | Sub-$2,500 CFL caps mean fewer licensed-lender offers in this band |
| $2,500 – $5,000 | Online lenders (Avant, Best Egg, Prosper, Upgrade, Upstart); licensed finance lenders at ≤ 40% | Minimum 12-month term applies; no prepayment penalty by law |
Lender minimums from our lender reviews (October 2026): Upgrade, Upstart and Happen Bank from $1,000; OneMain from $1,500; Avant, Best Egg and Prosper from $2,000; Discover from $2,500; LightStream and SoFi from $5,000. Availability varies by state and changes; confirm on the lender's site.
California small-loan laws at a glance
The Fair Access to Credit Act (AB 539) caps California Financing Law loans of $2,500–$9,999 at 36% plus the federal funds rate; loans under $2,500 have older, lower statutory tiers. Usury rule: 10% constitutional cap for lenders without a license or exemption.
| Product | Rule in California | Notes |
|---|---|---|
| Payday loans | Legal: max $300 face amount, 31-day term, fee ≤ 15% of face; one loan at a time; no rollovers | DFPI-licensed "deferred deposit originators" |
| Loans under $2,500 | California Financing Law tiered caps (roughly 12%–30% APR depending on size) | Many lenders decline to make these loans; credit unions fill the gap |
| Loans $2,500 – $9,999 | 36% + federal funds rate (≈ 40%); 12–60 month term; no prepayment penalty; credit-education offer required | AB 539, effective January 1, 2020 |
| Loans $10,000 and up | No rate cap under the CFL | Large personal loans from banks and online lenders |
| Credit unions | Federal credit unions 18%; PALs 28% | California has the most credit-union members of any state |
| Military borrowers | 36% MAPR under the federal Military Lending Act |
State law governs non-bank lenders. Banks and federal credit unions follow federal rules, which is why a bank credit card can exceed a state cap while a state-licensed lender cannot. Laws change; the "verified" date above is when we last checked the statutes and regulator guidance cited in the sources.
What a $1,000 loan costs in California, by source
Same $1,000, repaid over 12 months where the product allows it. Our amortization math at the ceilings described above; your rate depends on credit and may be far lower than a ceiling.
The order rarely changes: a credit union first, a national online lender or licensed installment lender second, and the payday product, where California allows one, a distant last. For $2,000–$5,000 the comparison is mostly between online lenders and credit unions; use the payment calculator with the APR from a pre-qualified offer.
Where California residents can borrow $200–$5,000
- A California credit unionFederal credit unions are capped at 18% and can make payday alternative loans of up to $2,000 at no more than 28% with no membership waiting period (PAL II). Find one you can join by county, employer or association with the NCUA locator. State-chartered credit unions follow California law and are usually priced similarly.
- A national online lender that lends in CaliforniaPre-qualify with two or three using soft inquiries. For $1,000–$2,000, Upgrade, Upstart and Happen Bank; for $2,000–$5,000, add Avant, Best Egg, Prosper and Discover. Offers show the APR with any origination fee included. See our lender reviews and bad-credit guide.
- A California-licensed installment lenderStorefront and online lenders licensed by the California Department of Financial Protection and Innovation must stay within the caps in the table above. Useful for borrowers who want in-person service or cannot get an online approval; ask for the APR and total of payments in writing before signing.
- Your existing creditors and employerBefore borrowing at all: hardship plans from utilities, landlords and card issuers cost nothing, and many employers now offer earned-wage access at little or no cost. Our emergency loan guide ranks every option by cost.
Your rights as a California borrower
- Payday lenders cannot roll a loan over or charge more than one fee; a returned-check charge is capped at $15.
- On a $2,500–$9,999 CFL loan the lender must report your payments to at least one credit bureau and offer a free credit-education program.
- Check any lender's license at dfpi.ca.gov; unlicensed loans may be void as to interest. Complaints: (866) 275-2677.
Federal protections apply on top of state law: the Truth in Lending Act requires the APR, finance charge, amount financed and total of payments in writing before you sign; the Equal Credit Opportunity Act requires a written reason if you are declined; and the Military Lending Act caps loans to active-duty servicemembers and dependents at 36% MAPR nationwide.
How to check a lender is licensed in California
- State regulatorCalifornia Department of Financial Protection and Innovation (DFPI), (866) 275-2677. Licensee lists and complaint forms are on the site.
- NMLS Consumer Accessnmlsconsumeraccess.org lists most state-licensed non-bank lenders with their California license status and history.
- Banks and credit unionsFDIC BankFind and the NCUA locator. Many online lenders issue through a partner bank named in the loan agreement.
- Scam signalsGuaranteed approval, any fee before funding, payment by gift card or wire, or terms above California's caps. Our scams guide covers the rest.
California personal loan questions
What is the maximum interest rate on a personal loan in California?
For loans of $2,500 to $9,999 from a California Financing Law licensee, 36% plus the federal funds rate, about 40% in late 2026. Loans under $2,500 fall under older tiered caps of roughly 12%–30%, and loans of $10,000 or more have no CFL rate cap. Banks and credit unions follow their own federal rules; federal credit unions are capped at 18%.
How much can I borrow with a payday loan in California?
A maximum of $300 including the fee, so about $255 in cash, for no more than 31 days. The fee is capped at 15% of the face amount ($45 on $300), which is an APR near 460% on a two-week loan. You can have only one payday loan at a time and lenders cannot roll it over.
Why do online lenders have a $2,500 minimum in California?
Because loans below $2,500 are subject to older, lower statutory rate tiers under the California Financing Law that many lenders consider uneconomic, while $2,500–$9,999 loans are allowed up to about 40%. If you need less than $2,500, a credit union is usually the best route.
Sources
State statutes and regulator publications as of November 1, 2026. We re-verify each state page after every legislative session and when a regulator announces a change. This page is general information, not legal advice; the regulator listed above can confirm current rules.
- California Financing Law, Fin. Code §§22303–22304.5 (rate caps; AB 539, 2019). leginfo.legislature.ca.gov
- California Deferred Deposit Transaction Law, Fin. Code §23000 et seq.; DFPI payday lending consumer page. dfpi.ca.gov
- DFPI, Annual Report of Payday Lending Activity (fee and APR figures). dfpi.ca.gov
- National Credit Union Administration, federal credit union interest-rate ceiling (18%) and Payday Alternative Loan rule (28%). ncua.gov
- Federal Reserve G.19, October 7, 2026 (national personal loan and credit card averages). federalreserve.gov
- Lender minimum amounts and state availability as verified for our lender reviews, October 2026.