If you live in Texas and you are experiencing financial difficulties, you may be looking for an option to help you bridge your financial gap between paydays. A Texas payday loan may be the help you need to satisfy your financial woes. Each state has laws that are tailored to the needs of its residents, and Texas is no different. Below you will find a short summary of rules that Texas lenders and residents must adhere to under Texas law. Before you apply for a Texas payday loan, you should be familiar with the laws of this state. If you are not a Texas resident, the laws of your state may be different than those listed below.
1. Licensing Requirements For Texas Lenders
Under Texas state law, all lenders must be licensed through the state in order to lend payday loans to consumers. This law protects borrowers from accepting a loan through a lender that has not met the standards set by Texas law. All lenders providing loans for Texas residents must display their Texas licensing certification on their loan documents and store fronts. A licensed lender under Texas law is one who collects a check for future payment in exchange for loan funds issued to the borrower as a Texas payday loan or who is authorized to automatically debit the borrower’s bank account on their due date.
2. Multiple Loan Requests
Currently, you may borrow a Texas payday loan from any lender who is licensed to lend money in the state. There are no maximum caps on how many Texas payday loans you can borrow from multiple lenders. However, lenders are limited to renewing a payday loan only once per month.
3. Fair Lending Requirements
A lender may only issue a Texas payday loan after doing a proper evaluation of the borrower’s ability to pay. This means that a lender must take precautions to ensure that the borrower can afford to repay the amount the lender loans out.
4. Fee Schedules
A Texas payday loan is subject to strict fee regulations under Texas state law. Loans over $30 but under $100 can only be charged a 1/10 fee. A Texas payday loan over $100 can only incur a $10 maximum per $100 borrowed. A Texas payday loan is also subject to handling fees. These fees vary, according to law, from $3.50 per month to $4.00 per month. Texas law requires lenders to post a fee scale for all Texas payday loans. Lenders are not permitted to divide a loan into multiple loans to increase fee charges.
5. Written Agreements
A Texas payday loan is a binding contract that must adhere to Texas state law. All loan documents must reflect the payment due date, the fee schedule applicable to the loan amount, and a statement of the terms and conditions of the loan. In addition, the contract must also state that a Texas payday loan is intended for short term use and not a long term solution to financial problems. Contracts for a Texas payday loan can only be entered into by those 18 years of age or older.
6. Loan Term Limits
Term limits for a Texas payday loan will vary by lender, but law requires a minimum of 7 days for repayment and a maximum of 31 days. However, a Texas payday loan lender can extend this repayment date if agreed upon with the borrower. Texas law permits the lender to apply additional fees in these circumstances.
7. Criminal Charges
Texas law does not allow lenders to prosecute borrowers in criminal court. Failure to pay can result in negative credit or charges in civil court.