What a payday loan costs — before Texas’s rules
A payday loan typically costs $15–$20 per $100 borrowed for a two-week term — roughly 400% APR — and is due as a single lump sum on your next payday. That single-payment structure, not the fee on any one loan, is the trap: most fees come from borrowers who cannot clear the balance in one go and roll it over. Where a state caps rates below payday levels, licensed payday lending disappears and a loan above the cap is generally void — not legally collectible, whatever the contract says.
The law in Texas
- Rate cap
- No effective rate cap. Lenders operate as "Credit Access Businesses" (CABs) under Texas Finance Code Ch. 393, charging largely unregulated broker fees on top of a third-party lender’s interest — APRs commonly exceed 300–500%.
- Key law
- Texas Credit Services Organization / Credit Access Business Act, Finance Code Ch. 393 (and Ch. 342).
- Enforcement
- The Office of Consumer Credit Commissioner (OCCC) licenses and regulates CABs; all lenders, including tribal-affiliated ones, must be OCCC-licensed, and many tribal lenders operate without the required license.
Texas sets virtually no state limit on CAB fees, so payday-style loans routinely carry APRs in the several-hundred-percent range — legally.
What it means for a Texas borrower
Texas is one of the most permissive states for licensed lenders: a Credit Access Business can legally charge several hundred percent APR. A tribal lender is a different case — Texas requires an OCCC license of every lender, and many tribal lenders do not hold one, so your leverage comes from licensing and disclosure violations rather than a rate cap.
Before you borrow in Texas
- Check the lender’s license on the OCCC website and file a complaint with the OCCC if it is unlicensed or overcharging fees.
- File a complaint with the Texas Attorney General’s Consumer Protection Division for deceptive practices.
Cheaper first — try these before a payday loan in Texas
Payday Loans and tribal lenders in Texas
Many online lenders that market payday loans to Texas residents are tribal lenders arguing their sovereignty places them outside state rate caps — a separate legal question this site tracks in depth. For which tribal brands lend to Texas residents and how state law applies to them, see the Texas tribal-lending page.
Tribal loans in Texas →Frequently asked questions
Does an online or tribal lender have to follow Texas's payday loan rules?
Texas applies its rules to loans made to its residents, wherever the lender sits. Tribal lenders argue that sovereign immunity puts them outside state rate caps — an argument courts have accepted in some cases and rejected in others. For which tribal brands lend to Texas residents and how the state treats them, see the Texas tribal-loan page.
What can I do about a payday loan I already have in Texas?
Texas allows this lending, so the loan is generally enforceable — but you can still revoke ACH authorization in writing, avoid taking a second loan to cover the first, and file a complaint with the Texas attorney general or the CFPB if the lender breaks the rules.