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Payday loans are small term loans given to debtors by companies who have registered with the concerned authorities of the state in which they are operating. The amount of the loan is generally small and the authorities have certain laws to protect its residents.
Texas payday loans laws came into force in 2000. Payday loans in Texas come with a maximum rate of interest and is not regulated by the authorities and the lenders are free to charge any interest. The effective annual percentage rate is 309%. The loan can be taken for a maximum of 31 days and for a minimum of 7 days.
Payday Loans in Texas
Texas (TX) laws have different requirements than other states as far as the fees for loans are concerned. If the loans are under $30, the lender is not allowed to charge fee more than $1 for every $5 that is borrowed. For Texas payday loans between $30 and $100, the lender may ask for 10% of loan amount as service fees, while for loan amounts over $100, no more than $10 can be asked by the lender.
Texas payday loan authorities also permit processing charges along with the interest and service fees being charged from the debtor. Hence, this increases the overall burden on the debtor. As long as the amount of Texas cash advance loan does not exceed $35, $3.5 is charged as processing charges every month. If the loan amount ranges between $35 and $70, a monthly handling charge of $4 can be charged. For loans exceeding $70, minimum of $4 may be charged every month for every $100 borrowed. Texas authorities have laws in place to prohibit lenders from dividing one loan into two in order to charge higher fees.
As required in other states, the lender must post the complete schedule of fees, debt and interest payments by the debtor.
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