Payday loans are legal and available in the state of Texas and consumers can find them both in-person and online. The unique thing about payday loans in Texas is that they can be due between two weeks to a month or due within six months. Payday loans make it extremely easy for bad credit consumers to get funding, but they come with a catch that can leave your financial situation worse than what you started with.
While many states have payday loan interest rate caps, Texas does not, however, there is an average interest rate of 400% you will find with payday loans. You won’t have to speak to a financial expert to know that a 400% APR is extremely high, and payday lenders can go even higher if they want to. And even six months of time may not be enough to pay back the principal and that enormous interest cost.
On top of that, Texas allows for multiple rollovers which, yes, can mean an extension is repayment, but it can also add more fees and interest to the loan. With all of these traits and lack of regulations, payday loans are going to be one of the most expensive and financially harmful lending solutions that you can turn to in Texas. In fact, many people who take out a payday loan have trouble paying it back and instead of getting out of a financially tight situation, may end up with more debt and financial instability than when they started with their loan inquiry. And so, Texas residents need to avoid these loan options at all costs, especially since there are exponentially more affordable and manageable loans for Texans.
Instead of a payday loan in Texas, turn to other subprime credit loan solutions like personal loans for bad credit. They often have more manageable repayment terms and are much cheaper than payday loans. While you may pay an average 400% APR for a payday loan in Texas, the average personal loan APR in the state was around 8%, with highest rates for bad credit borrowers around 20%. Along with that, you may be able to borrow more funds with a personal loan than a payday loan.