Payday Loans are Legal in Texas

Beware of predatory lending

Payday Loans in Texas

Payday loans represent a form of short-term credit intended for individuals who may require additional financial resources on a temporary basis due to personal circumstances. These small, short-term loans are generally scheduled for repayment on the borrower’s subsequent payday.

The state of Texas exercises regulation over payday loans, mandating that lenders comply with established rules and regulations. Prior to entering into a payday loan agreement, borrowers should thoroughly understand the associated fees and terms, which may be substantial. While payday loans can provide valuable assistance to those in need of short-term credit, it is essential for borrowers to fully comprehend all associated conditions in order to make well-informed decisions.

Finding legitimate payday loans in Texas can be a daunting task. With so many lenders offering different options, knowing which one is the best can be difficult. Fortunately, by researching the lender’s reputation, understanding the terms and conditions of the loan, and comparing different lenders’ offers, you can ensure that you get a safe and reliable payday loan. Start by researching their reputation – if they receive an overwhelming negative response this could be an indication that they do not provide trustworthy service.

Texas Laws about Payday Cash Advance Loans

Payday lending is legal in Texas. The Texas Office of Consumer Credit Commissioner (OCCC) regulates payday lenders and requires them to be licensed. Under Texas law, payday lenders cannot charge more than 10% as a fee but maximum interest rates can exceed 400%.

The State of Texas regulates entities with various potential payday lending licenses through several pieces of legislation:

State Loan Terms and Conditions

Maximum loan amount: No specified limit, depends on income

Maximum Interest Rate: No specified limit. Range from 300%-700%

Minimum loan term: 7 days

Maximum loan term: Six months

Number of rollovers allowed: Dependent on the city. No State limit.

Finance charges: Any

Legal action: 4 Years

Certified Payday Lenders in Texas

Company NameCompany scoreLicense Status
Ace Cash Express7.5Valid
MoneyLion7.1Valid
CashMax6.3Valid
Advance America5.9Valid
Net Pay Advance, Inc5.1Valid

History of Texas Payday Loans

Payday loans have been around for centuries, but their popularity has grown exponentially in Texas over the last two decades. Texas payday loans date back to the early 2000s when the State began to regulate them. Over the past twenty years, more than 45 cities have passed legislation on the terms and conditions allowed for payday loans in Texas. These loans are typically used for emergency expenses or unexpected bills that couldn’t wait until payday arrived.

How to file a complaint

To file a complaint against a payday loan provider, contact the
Texas Office of Consumer Credit Commissioner:

Texas Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

In Texas, payday loans can be difficult to escape but there are a few options. First, contact the lender and negotiate a repayment plan which may involve reducing amounts owed, extending payment periods or decreasing interest rates. As another option, consolidating debt with another loan or credit card may reduce payments, making it easier to manage payments. As a last option, you may be able to file for bankruptcy and have the loan discharged. It is important to remember that filing for bankruptcy should only be done as a last resort and you should discuss it with a lawyer.

Types of Quick Loans in Texas

Alternatives to Payday Loans in Texas

Personal Loans

Personal loans are a great way to get the money you need. Personal loans can be used for debt repayment, large purchases or unexpected expenses. Banks, credit unions and online lenders provide these unsecured loans with different terms and conditions depending on who you choose; so it is essential to shop around and compare rates and fees before deciding. Furthermore, ensure you understand the repayment terms so you can afford the monthly payments.

Land Loans

Land loans in Texas are an excellent way to finance the purchase of land. They can be used for raw land, agricultural land or even commercial property. Depending on which lender you select and what type of land is being purchased, loan terms will differ. Typically they require at least 20% down payment with higher interest rates than traditional mortgages. They also may require additional collateral, such as a lien on another property.

Construction Loans

Construction loans can be used to fund the building of a home or commercial property. Generally, these short-term loans cover materials, labor costs and other associated expenses associated with construction. Loan terms and conditions differ between lenders but typically require at least 20% down payment as an upfront cost. Furthermore, borrowers must have good credit and prove their ability to repay the loan promptly.

Bad Credit Loans in Texas

Bad credit loans in Texas can be a great option for those with low credit scores. These loans help those with bad credit rebuild and get back on track financially, though they often carry higher interest rates than traditional loans. When other options are unavailable, bad credit loans may provide the needed funding quickly and easily. Many lenders in Texas offer these types of loans, so it is important to shop around and compare rates and terms before deciding. Additionally, it is essential to make sure that you can afford the loan payments before taking out a loan for bad credit in Texas since credit score improvement depends on on-time loan payments.

VA loans in Texas

Veterans looking to purchase a home in Texas have many great options. VA loans are guaranteed by the Department of Veterans Affairs and offer competitive interest rates, no down payment requirements and no private mortgage insurance. Furthermore, VA loans have more lenient credit score requirements and debt-to-income ratios which makes them appealing for veterans who may not qualify for traditional loans. Moreover, VA loans provide closing cost assistance as well as other benefits which make owning a home more affordable.

Texas Student Loans

Texas students can take advantage of numerous student loan options to finance their college education. These may include:

  • Federal Student Loans: Texas students have access to federal student loans, an invaluable financial resource that can be used for college tuition and other associated costs.
  • Texas B-On-Time Loan: Funded by the State, this initiative offers zero-interest loans to qualified students who are Texas natives, meet financial requirements and maintain a minimum GPA.
  • Texas College Access Loan (CAL): Offers low-interest loans to applicants accepted into accredited universities and colleges within the State. With variable interest rates and flexible repayment terms, these loans can be highly beneficial.
  • Private Student Loans: Offered by banks, credit unions and other private lenders and often have higher interest rates than federal or state funding. May offer fewer repayment options.

Texas Small Business Loans

Businesses in Texas can take advantage of various loan options to help them grow and succeed, from traditional bank loans to specialized programs offered by the State.

Texas Income Information

According to the 2021 U.S. Census, the median household income for Texas was $67,321, which represents a 5.5% year-to-year increase. This is slightly lower than the national median of $70,717. Texas has a strong economy with a variety of industries and job opportunities. The state also has a low cost of living, which helps to keep wages “relatively” high. The poverty percentage in Texas in 2021 was 14.2%. Income and poverty levels vary drastically depending on the county. Rockwall County has the highest median household income of $105,956, that’s 66% higher than the state average, while Presidio County has the lowest, at $22,716, which is 66.4% below the state average.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on April 11, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Texas. Accessed on April 11, 2023.

Texas Payday Lender Complaints

Below are trends associated with the top payday lenders in Texas over the last 3 years as reported to the Consumer Financial Protection Bureau.

Company Name Count
Ace Cash Express 39
MoneyLion 13
CashMax 6
Advance America 3
Net Pay Advance, Inc 2
Total Complaints 411

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 11, 2023.

Most Common Issues

Complaint typeCount
Charged unexpected interest or fees80
Struggling to pay loan75
Received a loan you never applied for74
Unable to stop account withdrawals31
Issues with the payoff process at end of loan31

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 11, 2023.

What are the main reasons residents of Texas apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per our Survey, the percentage of reasons described below

ReasonShare
Rent10%
Food and Groceries25%
Gas and utilities20%
Other loan payments15%
Other15%
Other 215%

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 11, 2023.

Payday Lenders by City

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Most payday loans are not reported to the three major credit reporting agencies and typically lenders do not check your credit report. 

What do I need to apply for a payday loan?

You will need personal information such as name, address, valid social security number  and proof of a steady, recurring income source.

Can I cancel my payday loan?

In Texas, you may be able to cancel your payday loan the next business day after the loan was completed. You will need to repay the full amount.

Can a payday loan lender garnish my wages?

Payday lenders in Texas are prohibited from garnishing wages.

Can spouses have separate loans?

Yes, each spouse can apply for a loan separately and are treated as individuals.

When will I receive my funds if I am approved for a payday loan?

If you visit a storefront payday loan lender, you will receive your funds immediately. 

What happens if I can’t repay my payday loan on time?

In Texas, lenders may charge late fees, send your account to collections, or even take legal action against you.

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