Cash advance loans are legal in Texas, which passed its first payday loan statutes in 2000. Check cash advance creditors must be licensed to operate in the state. The law also requires them to display a notice containing the fee schedule and a loan agreement. In Texas, lenders are prohibited from loan-splitting, or the separation of one loan into two loans for the purpose of charging interest on both. The law does not specify the maximum number of outstanding loans that a borrower can have at a given time. However, a customer may not have more than $500 in aggregate loans that are outstanding. A payday loan business cannot institute criminal proceedings against a delinquent or defaulting borrower.
Texas law does not specify a maximum loan amount.
The loan term is 7-31 days.
Cash advance creditors are not permitted to renew or extend the loans.
Payday loan businesses can charge any fee or interest rate that the borrower is willing to pay. The maximum finance charges and fees that can be charged are $10 per loan and an annual interest of 48%. The finance charge for a two-week loan in the amount of $100 is $12. Additionally, cash advance lenders in Texas are allowed to impose handling charges.
The APR for a two-week loan in the amount of $100 is 309%.