If you reside in Texas and you would like to obtain cash advance loans, there are plenty of lenders willing to grant these types of loans. However, because of the risks associated with payday and other forms of quick cash loans, the Texas has put in place strict laws that govern the way in which these credit facilities are offered. Familiarizing yourself with the regulations could help you steer clear of any preying activities from some of the unscrupulous lenders.
Before you even think about signing any contract with the cash advance lenders, you should make a point of looking at some of these laws. Like many other credit facilities, cash advance loans are regulated by the Texas state giving specific rates as well as fees, which lenders should adhere to. This helps protect unsuspecting consumers from being taken advantage of by the lenders.
Again, it is paramount to understand that not all payday loan and cash advance lenders charge same fees and interests on their credit facilities; you have to do some comparisons to determine which ones are offering better terms of agreements as well as charges. The maximum amount that can be charged by payday loan lenders as fees or interest rate is $10 for every payday loan facility. The annualized interest rate for such payday credit facilities are 48% APR.
Considering that in some states, the lenders of payday loans have been charging as high as over 400 APR, it is essential that you protect yourself from such lenders. Although finance charges may be applied, however, Texas law also puts specific limits on how much can be charged. For a $100 cash advance payday credit facility, the amount that is charged on such amount is $12 within a 2-week duration.
Besides the charges and fees that can be levied on cash advance loans like payday loans, there are also limits put forward to guide consumers and lenders on the maximum amounts that should be granted to consumers. Payday loans are considered high-risk credit facilities and without restrictions, consumers could easily find themselves trapped in circles of debts.
Texas State has defined laws that guide consumers in determining how much they should expect from lenders. The total amount of dollars one can get as payday loan cash advance cannot exceed $500. However, there may be no regulations, which guide consumers on how many of these cash advance loans they can receive. When a consumer has paid the $500 cash advance loan, he or she can apply for another if needed.
The payment period that is set by the Texas law on payday loans is a payoff of the amount in not more than 31 days from the date of issuance. But, many cash advance lenders have pay off periods that are shorter often between one week and two weeks. The total amount borrowed or the principle plus the fees and interest should be paid within this period. Understanding the Texas law on usury would keep you protected from the exorbitant interest rates charged on cash advance facilities.