ARTICLE 5. Finance Charge Limitation [1805.1. - 1805.9.]

Cal. Civil Code - CIV 5.
in effect

Cal. Civil Code - CIV § 1805.1. Section 1805.1.

The holder of the contract shall not charge, collect, or receive a finance charge which exceeds the dollar amount shown pursuant to subdivision (b) of Section 1803.3, except to the extent (a) caused by the holder’s receipt of one or more payments under a contract which provides for determination of the finance charge or a portion thereof on the 365-day basis at a time or times other than as originally scheduled, whether or not the parties enter into an agreement pursuant to Section 1807.1, (b) permitted by paragraph (2), (3), or (4) of subdivision (c) of Section 226.17 of Regulation Z, or (3) permitted by Section 1805.8. No annual fee or charge shall be made in any retail installment contract.

Cal. Civil Code - CIV § 1805.4. Section 1805.4.

The finance charge shall be inclusive of all charges incident to investigating and making the contract and for the extension of the credit provided for in the contract, and no fee, expense or other charge whatsoever shall be taken, received, reserved or contracted for except as otherwise provided in this chapter. The seller or holder of a retail installment contract may charge and collect a fee not to exceed fifteen dollars ($15) for the return by a depository institution of a dishonored check, negotiable order of withdrawal, or share draft issued in connection with the retail installment contract. The fee is not included in charges as defined in this chapter or in determining the applicable charges which may be made under this chapter.

Cal. Civil Code - CIV § 1805.6. Section 1805.6.

(a) Notwithstanding the provisions of any contract to the contrary, except as provided in subdivision (b) or (c), no retail seller shall assess any finance charge for goods purchased under a retail installment contract until the goods are in the buyer’s possession. (b) A finance charge may be assessed for such undelivered goods, as follows: (1) From the date when such goods are available for pickup by the buyer and the buyer is notified of their availability, or (2) From the date of purchase, when such goods are delivered or available for pickup by the buyer within 10 days of the date of purchase. (c) In the case of a home improvement contract as defined in Section 7151.2 of the Business and Professions Code, a finance charge may be assessed from the approximate date of commencement of the work as set forth in the home improvement contract.

Cal. Civil Code - CIV § 1805.7. Section 1805.7.

All contracts entered into between a buyer and a seller on or after January 1, 1983, shall provide for the calculation of the finance charge contemplated by item (1) of subdivision (a) of Section 1805.1 on the simple-interest basis if the date on which the final installment is due, according to the original terms of the contract, is more than 62 months after the date of the contract.

Cal. Civil Code - CIV § 1805.8. Section 1805.8.

The maximum rate of finance charge which may be imposed on amounts advanced by the holder subsequent to the execution of the contract for insurance, repairs to or preservation of the goods, or preservation of the holder’s security interest therein, shall not exceed the annual percentage rate disclosed pursuant to item (b) of Section 1803.3.

Cal. Civil Code - CIV § 1805.9. Section 1805.9.

No contract shall provide for a finance charge which is determined in part by the precomputed basis and in part by the simple-interest basis, except for any finance charge permitted by Section 1805.8.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026

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