Texas Payday Loans Unfiltered
For many people throughout Texas, living from one paycheck to the next is a way of life. Unfortunately, this means that when something unexpected happens like a home repair or a trip to the doctor, there is not money available to pay for the necessary costs and get through to the next paycheck. This is when people will look for fast cash loans.
For many in the situation of living paycheck to paycheck, there are limited options available as far as how to get the money you need to meet short - term expenses. Many people do not have a credit card or cannot qualify for one as a result of bad credit. Obtaining a bank loan can be impossible and impractical both because of credit issues and because it can take a long time for the loan to come through. Bank loans and credit cards also do not make the most sense for resolving a short - term cash problem.
To meet the needs of those who need to borrow a little sum of money for just a limited time, payday lenders offer loans with minimal qualifying criteria. These loans are easy to obtain, even for those with bad credit, provided that you are employed, have a bank account and can show that you will have a paycheck coming in. These short - term payday loans usually last for a few days or weeks and then you will need to repay the money, although some people fall into a dangerous cycle of extending the payday loans since they cannot always repay them right away.
The convenience of quick loans coupled with the easy qualifying requirements make these types of loans a popular choice, but they are not a choice without risk. The biggest downside to payday loans is that you will pay a very high fee for the money that you need to borrow. A person borrowing $100, for example, may end up paying a fee of around 17 percent in order to borrow the money for two weeks. This works out to an effective interest rate of over 450 percent per year.
The interest rate is the cost of borrowing, and you always pay some interest for any loan. However, an effective APR (annual percentage rate) exceeding 450 percent is many, many times higher than the interest rate on a typical credit card or loan.
The high interest rate, you need to be careful when taking out payday loans. Most financial experts advise against them, although they can make sense in limited situations when the need for cash is truly pressing and when you know you can pay the loan back with your next paycheck.
Texas Payday Loan Laws
The high cost of Texas fast cash loans has led many lawmakers to believe that these loans are "predatory" and should be limited or controlled. In the state of Texas, there are a number of different laws that impose limitations on payday lenders in order to protect borrowers.
For example, fast cash Texas loans must be for a minimum of 7 days and a maximum of 31 days. Texas also limits the fee to 10% per loan and 48% annual interest plus a $12 monthly fee. If this sounds like a high limit, that is because it is. A person who takes a 14 - day $100 loan could face an APR of 309%, and that's a very high amount to pay to borrow money.
Texas also has special protections for military members and their families because many in the military rely on payday loans and because lawmakers want to ensure they are not taken advantage of. The law, S.B. 1479, indicates that lenders must make special disclosure to military members and that payday lenders are limited in the actions that they can take towards military members.
Stay Educated About Payday Loans
Understanding the laws in Texas can help you to better understand the risks that you take on when you borrow money from a payday lender. While the law does provide some limited protections, it is up to you to make sure that you understand what you are getting into and the interest rate that you are going to have to pay when you take on a payday loan.