Texas Payday Loans

If you are looking for a payday loan or a cash advance in Texas, you should be aware of the state laws, rules and regulations that apply to these types of loans. Payday loans are short-term, high-interest loans that are secured by a personal check or an authorization to debit your deposit account. The lender agrees to hold the check or the authorization until a future date, usually your next payday.

According to the Texas Finance Code, Chapter 342, Subchapter F, payday loans can have a maximum cash advance of the lesser of $2,000 or 70% of the borrower's monthly income. The maximum fee that can be charged for a payday loan is $10 per $100 of cash advance plus an administrative fee of up to $4 per month. The annual percentage rate (APR) for a 14-day payday loan of $100 is 410%.

Payday loans are regulated by the Office of Consumer Credit Commissioner (OCCC) and require a license from the OCCC to operate in Texas. Some cities in Texas have also passed local ordinances that impose additional restrictions on payday lending, such as limiting the number of rollovers, requiring credit education, or mandating payment plans. You can check with your local city hall or the Texas Municipal League to find out if your city has any local regulations on payday lending.

Before you take out a payday loan, you should consider the cost and risks involved. Payday loans are expensive and can lead to a cycle of debt if you cannot repay them on time. You may also face legal action or collection efforts if you default on your loan. You should explore other alternatives, such as borrowing from friends or family, seeking assistance from a nonprofit credit counseling agency, or applying for a personal loan from a bank or credit union.

If you decide to take out a payday loan, you should shop around and compare the rates and fees offered by different lenders. You should also read the loan contract carefully and understand your rights and obligations as a borrower. You should only borrow what you can afford to repay and avoid taking out multiple loans at the same time. If you have any questions or complaints about your payday loan, you can contact the OCCC at 1-800-538-1579 or visit their website at https://occc.texas.gov/.