Payday Loan Laws in Texas
Payday loans are one of the most common short-term loan options when the need for immediate cash becomes necessary. The payday loan laws in Texas, however, are particularly borrower friendly, as limits on fees and the prohibition of rollovers prevents the short-term loan from becoming a long-term financial problem. The full disclosure of the fee schedule is an added benefit for borrowers, as this disclosure is also required to provide the contact information for the Consumer Credit Commissioner should a complaint wish to be filed.
It is important to note that payday loans are not available in every state and laws and regulations vary by state. Information for Texas Payday Loans is provided for your convenience.
Texas payday loans have gained a reputation for being an expensive financial choice, the payday loan laws in Texas have eliminated the excessive costs that are traditionally handed to the borrower. This includes the placement of strict regulations on the fees that lenders are able to collect.
Payday loan lenders are required by law to post a fee schedule that clearly states the details of the loan, including the amount of the fee that will be charged on the specific loan balance. While the amount of the allowable fee is dependent upon the amount that is borrowed, the schedule of fees is listed as:
*Loans up to $30: $1 charged on every $5 borrowed.
*Loans between $30-$100: 1/10 of the amount borrowed.
*Loans over $100: Fees up to a maximum of $10.
Handling charges may also be applied to the above service fees, with these costs itemized as:
*$3.50 per month for loans less than $35.
*$4.00 per month for loans between $35-$70.
*An addition $4.00 per month for every additional $100 borrowed.
Although this does mean that two types of fees may be applied to a payday loan, they are far less than what may be charged by lenders in other states. Loan balances are limited to a maximum of $500 per person, however, although there is no limit on the number of loans that may be held as long as the total amount is less than the $500 limit. The length of these loans is also limited to a minimum of 7 days, with a maximum of no longer than 31 days.
Borrowers in Texas also have the added protection of the fact that rollovers are prohibited. This means that unpaid loans cannot be renewed in hopes of the lender acquiring additional profit through interest. However, renewals are allowed so long as this additional interest is eliminated. Texas laws also require that the contact information for the Consumer Credit Commissioner be readily available should a borrow wish to file a complaint.
Payday loans offer a fast and easy way to obtain necessary cash for whatever circumstance arises, with the lack of a credit check and extensive paperwork making them available to virtually anyone. Texas laws have made these loans particularly favorable to the borrower, as limits on fees and the prohibiting of rollovers prevents lenders from engaging in unscrupulous practices in order to garner an excessive profits. The availability of contact information should a complaint need to be filed is an added benefit of payday loan laws in Texas, as combined with the regulations concerning
fees, these loans offer a financial option that is both safe and affordable.
Take a look at the benefits of applying for Online Payday Loans if available in your state.
Rudi is a credit analyst who writes articles about credit scores, building credit, and consolidating debt. His know-how on poor credit and credit unions make his input invaluable to our company. There is no credit score out there that Rudi can’t help with.