Please Take Notice: The breakdown below that covers regulations for short term loans in Texas is provided for general information purposes only. This information should not be intended in any way as a legal reference. Texaspaydaylenders.org is not able to give any type of legal advice or recommendations when it comes to payday or installment loans. Please reach out to the appropriate Texas Government agencies if you have questions regarding specific payday loan laws in the State of Texas. A good place to start when it comes to specific research would be the Texas Financial Regulation Division. Also, most large cities in Texas like Dallas, Houston and San Antonio have citywide ordinances in place that cover payday loans.
Texas has gone easy on the payday loan industry over the past few years. Whereas most states have strict regulations that govern interest rates, length of loan and extensions, Texas has taken a hands off approach. As it stands now, the maximum time a payday loan can be given is 6 months or one month for each multiple of $20 over $100. Additionally, no payday lender can charge a start-up cost of no more than one tenth of the amount borrowed. It should be noted that a start-up cost can not be deemed as being subject to interest charges. Keep in mind, some cities like Dallas and Houston have their own mandates that regulate payday loans and other types of short-term loans.
There were attempts to regulate the industry a few years back. At that time the Texas Legislature attempted to pass laws that would cap interest rates and limit the times a lender could roll over a loan. These regulations didn’t make it very far. With that being said, many consumer advocates hope these regulations are updated and passed some time in the future, but at this point, it’s tough to tell. Dallas and Houston have some new ordinances they’re hoping to roll-out soon as well. Texas has always had a pro-business mindset and it seems that will continue for the time being. As an example there are currently numerous active lenders of Texas payday loans and installment loans It may be prudent for Texas to adopt some type of interest rate caps in order to better protect their consumers. There’s no need to eliminate payday or installment loans like some states have already done. These types of short term loans have a need in society but only if issued to the right person under the correct circumstances.
Dallas and Houston have their own ordinances for online loans!
Our recommendation is to only use online loans as a last resort. Many large metropolitan areas like Dallas and Houston have many options when it comes to getting a payday loan. Dallas alone has dozens of payday loan lenders within the downtown area! There are plenty of options you’ll want to explore before taking out a short term loan. For example, you can borrow money from a friend, have a garage sale, or try to get a loan from your bank or employer. As mentioned above, these types of short term loans have incredibly high interest rates. Also, some predatory lenders will attempt to rollover a loan without you knowing. This means that even if you want to pay off a loan in 1-2 weeks they will only withdrawal the finance charge. Essentially you’ll be stuck in an endless cycle of paying payday and installment loans if you don’t know what’s going on. If you take out a short term loan for a financial emergency with the intention of paying it back in weeks opposed to months then you’ll be fine. Problems arise when consumers take out a loan for something they want, not something they need. As mentioned above, please consult with your city ordinances if you live in a large city and need more info. For example, if you’re looking for information on Houston or Dallas payday loans. The short term financing options discussed on this site are bound to be around in some for foreseeable future. While we don’t know what type of future regulations will come into play, we do know the rules regarding online loans in Texas will change. There are new rules set to hit the books in 2017 in cities like Dallas and San Antonio. We urge you to check with your state regulators and your specific city to find out the latest changes regarding online loans in Texas.