Texas Payday Loans FAQ

Frequently Asked Questions about Texas Payday Loans

• What is a payday loan?
• I've heard bad things about payday loans. Should I take one out?
• What are the fees for borrowing a payday loan in Texas?
• How do I pay back my payday loan?
• Can I rollover or refinance my Texas payday loan if I can't pay it back on time?
• Is it important that a payday loan company in Texas is a state-registered CSO?
• I don't live in Texas, but I want to take out a payday loan. Have you reviewed payday loans in other states?
• Are payday loan sites secure?
• How did NextAdvisor review these payday loan services?
• What if I have complaints or concerns about a Texas payday loan company?

What is a payday loan?

A payday loan is a short-term loan that does not require a credit check, just proof of your employment and a valid driver's license, phone number, and other basic information. In Texas, a payday loan company acts as a CSO (Credit Service Organization) which will extend credit to you from a third-party financial institution for a fee. Generally, the loan amount and fee are withdrawn from your checking account on your next payday. Note that companies who are not registered in Texas are not CSOs and are not bound by the same laws.

I've heard bad things about payday loans. Should I take one out?

Quite honestly, this depends on your particular situation. People tend to get in trouble when they can't pay back their loan, and are forced to refinance. The fee for borrowing, which comes out to roughly 25%, may not seem bad if you really need the money, but if you have to refinance, you'll be paying that fee twice.

What are the fees for borrowing a payday loan in Texas?

The CSO charges a service fee, generally between $22.00 and $25.00 per $100.00 borrowed. The financial institution which covers the loan also charges a state-maximum interest rate of 10% (per annum). The interest rate is just a small portion of the fee, generally less than a couple of dollars. There can be additional fees for delinquent payments.

How do I pay back my payday loan?

Your loan is secured through your checking account. Generally, the money will be withdrawn automatically from your account on your next payday. Different companies have different minimum and maximum loan periods, meaning that if your next pay period is too close to your borrowing date, it may come due on the following pay period. Make sure to check the terms of your loan.

Can I rollover or refinance my Texas payday loan if I can't pay it back on time?

Most CSOs will let you refinance your loan up to 4 times, if you pay the original fees, and accept new loan fees of the same amount (you must contact your CSO before the due date). Obviously this can really add up; refinancing just once on a $100.00 loan will cost you roughly $50.00 in fees and interest. If you refinance a $100.00 loan four times, you'll have paid $125.00, just in fees and interest (plus the original loan amount). Refinancing a $1,000.00 loan four times will cost you $1,250.00 in fees, bringing your total amount due to $2,250.00. That's why you want to pay it off on time. According to Texas law, you're entitled to a 10-day grace period before a 5% delinquency fee can be accessed. If you don't have available funds in your account, you may be subject to charges from your bank for a bounced check.

Is it important that a payday loan company in Texas is a state-registered CSO?

Yes. You'll be much better off borrowing from a company registered in your state. Putting your financial well-being in a company not bound by state, or even federal law puts you at risk. Even if a non-registered lender promises to charge you less, we don't recommend doing business with them. You will not have the same recourse if disputes arise.

I don't live in Texas, but I want to take out a payday loan. Have you reviewed payday loans in other states?

We work hard to review each lender in each state, and make sure the offers they advertise are compatible with state regulations and privacy laws. So far we've only reviewed payday loans in California and Texas. However, the companies we've reviewed offer payday loans in many different states. While, the financial information we display is state-specific, you may find our reviews helpful in finding a reputable payday loan company in your state.

Are payday loan sites secure?

It depends on the site. We have confidence in our top-rated sites, but recommend that users avoid doing business with payday loan lenders who operate off-shore, as the one-star lenders we reviewed do. We also recommend that users opt-out of any offers to have their information shared with other lenders or advertisers.

How did NextAdvisor review these payday loan services?

We carefully researched the payday loan laws in Texas and looked at the offerings of each lender. We looked at the privacy and information-sharing policies of each provider, paying particular attention to how easy it is for customers to opt out of informations haring. We checked the CSO registration with the website of the Texas Secretary of State, and the payday loan company's score with the BBB (Better Business Bureau).

What if I have complaints or concerns about a Texas payday loan company?

You can file complaints against a Texas payday loan company through the Texas State Attorney General's Office. You can also submit reports to the Better Business Bureau.