Is everything really bigger in Texas? Find out how much you can borrow in the Lone Star State.
If you’re in need of quick money, you may be considering a payday loan. It’s important to understand the laws in place to protect borrowers before you accept any offers. Read through this guide to learn the ins and outs of payday lending in Texas.
Get a convenient payday loan, installment loan or line of credit with fast funding, depending on your state of residency.
- Loan Amount: Varies by state
- Turnaround Time: As soon as 1 business day
- Simple online application
- No hidden fees or paperwork
- Dedicated customer service
- Confidential and secure
What are the payday loan laws in Texas?
Payday lending is governed by a diverse array of laws in Texas, but the main one is Texas Financial Code Ann. §§342.251 et seq., which applies to online and storefront loan providers. All lenders must be licensed in Texas and are required to clearly state the terms of the loan (how much you borrow and how long you borrow for) before you sign.
The maximum loan term depends on the amount you borrow. For a loan of $100 or less, it is either six months or one month per $10. For a loan greater than $100, it is one month for each multiple of $20, meaning a loan of $122 would have a term of six months.
You can borrow any amount of money through a payday loan in Texas, but keep in mind the more you borrow, the more your loan will end up costing. Only take out as much as you can afford, and be sure you budget for the high cost of the loan.
Here’s a list of payday lenders you can look into
Check the websites of any providers you’re interested in to confirm they operate in Texas.
How much does a payday loan in Texas cost?
Texas law doesn’t specify a maximum financing fee, and the APR is about 410% per loan. You should read your contract carefully before signing because it lists all the possible fees you’ll have to pay.
Texas law specifies acquisition charges for different dollar amounts. The list below will give you a clear idea on what these are.
- Less than $30. $1 for each $5 borrowed
- $31 to $100. 10% of the amount borrowed and a handling charge of $3/month for loans less than $35, $3.50/month for loans between $36 to $70 and $4/month for loans between $71 a $100
- More than $100. $10 and a handling charge of $4 per $100 borrowed
If you’re late on a payment or miss one entirely, you’ll have to pay a late fee of either 5% of the payment or $7.50. If you don’t have enough money in your account, lenders are allowed to charge for filing fees and a $30 non-sufficient funds (NSF) fee.
High interest caused by loan brokersSome companies will charge fees for “brokering” loans. This means they will connect you with a third-party lender that only charges the legal amount of interest, but the company you go through will require payment for finding you a loan. If you want to use a service to make the loan-finding process easier, there are free and reputable alternatives.
What do I need to apply for a payday loan in Texas?
Lenders will require you to be at least 18 years old, have a regular source of income and be a citizen or permanent resident of the US in order to apply. If you meet these minimal criteria, you can begin your application.
Although all applications differ, lenders usually want you so supply personal information about yourself, your bank account and your current employment status. This includes your Social Security number and access to your checking account if you’re applying online. If you have all the application materials close by, the process should take no more than fifteen minutes to complete.
Are there other alternatives to payday loans?
Although Texas regulates many issues in regards to payday loans, it is best to consider other options first. If you decide to take out a payday loan, keep in mind you usually must repay it within two weeks, and the interest rates are steep.
Assistance programs like the North Texas Food Bank, the Texas Medicaid Program, Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP) all help people struggling to make ends meet. You can apply for these services for help with your regular bills while you work on paying down your debt.
Payday loan laws in Texas can be confusing, but they can be useful when you’re stuck trying to pay for an emergency expense. Be sure you read your entire loan contract to avoid falling into a debt trap, and before you borrow, consider all your other options first.
Do you have any more questions about payday loans in Texas?
What if I can’t pay back my loan by the due date?
If you’re unable to pay the full amount, Texas law allows you to refinance your loan. The process varies depending on your lender, but often comes with steep charges and keeps the amount of accrued interest. You may want to request a payment plan if you’re struggling to make the total payments.
You won’t be able to get a rollover if the maximum interest rate exceeds the renewal charge.
Can I have more than one payday loan at a time?
Yes. Texas allows for any number of loans to be taken out at once.
Is there a legally required cooling off period between loans?
No. There is no cooling off period in Texas, but you’ll want to limit the amount of loans you take out in order to save money on interest costs.
Can a payday lender initiate criminal action against me if I don’t repay my loan?
It is technically illegal, but there have been cases of lenders filing suits against borrowers in the state. Be careful where you borrow money from and make sure you work with a reputable lender.