First thing that lenders should know is that payday loans have a great deal of synonyms - they can also be called cash advances and cash loans as well as deferred deposit check loans and so on. In accordance with the Federal Trade Commission these are short-term small in amount loans that are offered to customers under the interest for a brief period of time.
Payday loans were initially meant as emergency help in cases when cash is needed urgently and delays are very undesirable. In terms of fast cash this is a brilliant option for many customers especially the ones with bad credit. The latter group often applies for such short-time unsecured products due to the fact that they are unable to rely on any traditional lending option simply because of the risk of being rejected.
With payday lenders the procedure is very simple and this is yet another reason why Texas borrowers tend to resort to this option. Here payday loan requirements are no less strict than in other states and they mostly presuppose a borrower being able to provide the proofs of income, employment as well as identity. One of the major Texas difference is that in accordance with the laws payday loans are prohibited to be granted for the borrowers in the military service.
One of the trickiest things about payday loans in Texas is that payday loans so far are not restricted in terms of loan amount or interest rate. Unlike some other states Texas lenders can charge the rates they find appropriate and offer loans in amounts they, yet again, find appropriate. They are not strictly limited as their colleagues from neighboring states, for instance. This means that the rates differ a lot from lender to lender and it is really important to make sure that you learn all the particulars before you actually enter the lending agreement. This is the essential condition for wise lending in general; however, it makes even more sense with payday loans because of their short-term nature.
In fact, payday lenders in Texas go under a differ rent name - CSO (Credit Services Organizations). First of all, they do not sell loans to other states and they act like brokers to some extent. They operate as mediators that act in between the lender and a customer.
Before 2011 it was even easier for payday lenders in the state to operate, as it was just a registration certificate and third party lender in order to be a CSO. However, since the House Bills 2592 and 2594 passed, payday loan regulation in the state underwent a bit of a change. They are now called CAB (Credit Access Businesses) and are obliged to comply with the laws that were introduced in 2012.
In accordance to them, a lender must disclose rate and repayment terms in details (the finance charge and APR and etc) and have a state license in order to operate in the state - these things are strongly recommended to be paid attention to when applying for a loan.
Before applying for a payday loan in Texas it is important to keep the aforementioned things in mind. This small loan option can be truly helpful in many situations and especially when it comes to emergencies. However, as it has also been mentioned, they are more expensive and can get your in trouble with the repayment provided that you were inattentive about the interest rate or repayment terms.
At FEDPAYDAY.com we represent a mediator company that does not offer payday loans or short-term unsecured loan products of any kind in the state of Texas directly. However, we have a very broad database of Texas-based payday lenders who we easily can match you up with. Taking into account your needs and requirements we provide assistance in finding you the most beneficial offer. All our partners are licensed and work in accordance with the Texas state laws.