Texas Payday Loans - A Guide to Cash Advances and Payday Loans in Texas

Cowboys and astronauts, half backs or short stops, from Plano to Padre Island, most Texans have found themselves short on funds on occasion. Many have credit cards that they can use for cash advances, most have family or friends they can hit up for some bucks, and some are fortunate to never have money problems. But for many ordinary working citizens of the Lone Star State, cash advance companies or payday lenders become the only source of cash in emergencies. As varied and numerous as the people of Texas, so is the availability of companies offering cash advance payday loans.

A payday loan is a small loan, usually from $100.00 to $500.00, is short term, normally two weeks or 30 days. It comes with a very high annual percentage rate, but can be managed if it is repaid by the due date. The big advantage of a payday loan is that it’s quick, requires no credit check, and available almost anytime. There are few requirements, usually valid identification, recent paycheck stubs, proof of residence, a contact phone number, and a post-dated check. The loan can be renewed by paying the interest on it, and you then have another week or two to pay it off.

Some lenders use sham transactions, such as internet access with a rebate schemes, to cloak loans. In Texas, most lenders now operate as unregulated "credit services organizations" to evade state small loan limits set by the Texas Finance Commission under the small loan law. The Federal Deposit Insurance Corporation has taken enforcement action to stop a dozen or so small banks from "renting" their charters to help payday lenders operate in states that do not authorize these loans or interest rates. You should understand with certainty the terms of the loan when dealing with internet lenders. If the internet lenders business is in another state, they operate under the laws of that state, rather than the laws of Texas. Internet payday lending adds security and fraud risks to payday loans. Customers either fax or e-mail the required documents. The proceeds are direct deposited into the borrower's bank account and electronically withdrawn on the next payday. Many on-line payday loans are set up to automatically renew every payday, with the finance charge electronically withdrawn from the customer’s checking account. Try your very best not to fall into this trap.

There certainly are pros and cons to payday loans, and it’s up to you to ensure that you are aware of the costs and responsibilities involved. Payday loans are quick and easy, you don’t need credit, and any one with an income and a checking account can qualify for a loan. They certainly are a better choice than bouncing checks, which can cost plenty more, or even land you in Jail. Payday loans can cost you a good bit in fees and interest, but they cannot land you in jail. If you should have your check bounce to a payday lender, they cannot threaten you with criminal charges. If they do, they have broken the law.