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Texas is the 18th least expensive state to live in, with a cost of living index of 92.9. But even in a state where the cost of things like groceries, housing, transportation, and even health is lower than the national average, it can be difficult to get by.
When emergencies or unexpected expenses like a surprise medical bill or auto repairs come up, they can put you in a financial bind. This can happen to anyone, but especially to those who have limited savings or are already struggling with everyday bills. That’s where short-term financing solutions, like payday loans in Texas, come in handy.
What is Payday loan?
A payday loan is a type of short-term loan that is typically due to be repaid on the borrower's next payday. These loans are also referred to as cash advances, paycheck advances, or payday advances.
The primary purpose of payday loans is to provide individuals with a quick source of cash to cover unexpected expenses or emergencies that cannot be met with their regular income or savings.
If you need cash now, Jora offers installment loans in Texas with an easy, quick online loan application and fast credit decision and funding times.
There are many online and storefront lenders offering payday loans throughout the state of Texas. To find one, simply type in "payday loans near me," "payday loans near me in Texas," or "cash advances near me" online.
While the exact definition of a payday loan varies, these loans share several common features.
These loans come in small amounts, usually no more than $500. Some lenders offer larger or smaller loans. However, the exact loan amount depends on the borrower’s income and, in some cases, credit score.
With that being said, most lenders do not check the borrower’s credit score when deciding whether to approve a loan application. This makes payday loans especially appealing to individuals with bad or limited credit.
Unlike installment loans, payday loans usually have a very short repayment term. In Texas, the minimum repayment term is seven days. However, most lenders require the borrower to repay their loan on their next payday — usually two or four weeks after receiving funds.
To get a payday loan, the borrower may need to authorize an electronic debit or write a post-dated check for the loan’s principal balance plus any fees. On the loan’s due date, the lender can either withdraw the funds directly from their account or cash the check.
Payday loans do not usually have a prepayment penalty, meaning paying off the loan early will not incur additional fees. However, the short repayment term can make it tricky to do this.
Once approved and accepted, the borrower typically receives the funds via check, cash, or an electronic deposit to their bank account. Some lenders will disburse funds via a prepaid debit card.
Payday loans are prohibited in certain states. However, they are legal in Texas.
That said, payday lenders must adhere to specific regulations when offering these short-term loans. For example, payday loans in Texas have a minimum loan term of seven days. They also have a maximum repayment period of six months.
Payday lending laws often change. If you’re considering getting one, check with the Office of the Attorney General in Texas to see the current regulations. You can also see the status of payday loans in every state on the National Conference of State Legislatures website.
Regarding payday loans, the draw limit refers to how much money you can take out — that is, the maximum loan amount. In Texas, there is no set maximum draw limit. However, most payday loans come in small amounts, starting at around $100. Loan amounts may go as high as $1,000 in some cases.
Before taking out a payday loan, it’s also important to consider any financing fees or additional charges. Most lenders tack on a financing fee between $10 and $30 per $100 borrowed. You must pay this extra amount plus the original balance when the loan comes due.
Compare different payday lenders in Texas before choosing one to ensure you get the lowest fees possible. If the financing fee is too high, consider an alternative option like online installment loans or personal bad credit loans.
As a short-term lending solution, payday loans are primarily designed to cover immediate or emergency expenses. Many borrowers also use them to bridge the gap between their current funds and their next paycheck.
Here are some of the most common loan purposes for payday loans in Texas:
- Small emergency home repairs
- Car repairs (e.g., flat tire)
- Surprise hospital bills
- Sudden veterinary expenses
- Other one-time emergency costs
- Credit card or auto loan payments
- Everyday or necessary expenses (e.g., utilities, rent or mortgage payments, food costs)
Many of these reasons are similar to why people take out other loans, which you can get from online installment loan direct lenders.
Payday lenders in Texas typically have very lenient requirements, especially compared to personal loans like auto or mortgage loans. This makes them a solid option for borrowers who have trouble qualifying for traditional financing solutions and need quick cash.
Although every lender is different, here are the most common payday loan requirements in the Lone Star State:
- Minimum Age: Borrowers must reach the “age of majority” to take out a payday loan. In Texas and many other states, this means they must be at least 18 years old (19 if live in AL).
- Bank Account: To qualify for a payday loan, you must have an active bank or credit union account in your name. Lenders may use this account to disburse funds after approving the loan. If you’ve authorized a direct debit, the lender can also withdraw the amount you owe — plus interest or financing fees — directly from your account.
- Proof of Income: Although there are no set income requirements to get a payday loan, you’ll still need to show proof of income to get a loan. This can come in many forms, such as a recent paystub or W2, a state or federal income tax return, or a valid employment letter.
- Direct Deposit: Some lenders will require you to have direct deposit from your current employer.
- Valid ID: When applying for a payday loan, you’ll typically need to show a government-issued photo ID. It should include your full legal name, birth date, and current address. Commonly accepted options include a state driver’s license or a passport.
- Current Contact Information: The payday lender may require you to provide basic contact information, such as your physical or mailing address, phone number, and email address.
Generally, you will not need to undergo a credit check when applying for a payday loan. This makes it easier for borrowers with bad credit or limited credit history to qualify for a loan.
Once you have all of the required information, the actual process of applying for a payday loan is straightforward. Simply find a reputable lender — either with online loans or storefront loans — and complete their application process. As with online installment loans, the entire application should only take a few minutes.
Payday loans can be a great option for those with difficulty getting other types, such as unsecured personal loans. As with any loan, however, it’s essential to understand the pros and cons of taking one out.
Here are the main advantages of payday loans in Texas:
- No Collateral Requirements: As a type of unsecured loan, payday loans do not require collateral in exchange for funds. Although you’ll still be responsible for paying back what you borrowed, there’s minimal risk of losing your personal belongings if you default on the loan.
- Minimal Loan Requirements: Qualifying for a payday loan in Texas is usually simple. Most lenders do not even check your credit score when deciding whether to lend you money. This means you could still be approved with poor or fair credit.
- Fast Approval and Funding Times: The payday loan application process is typically quick, whether you’re applying online or in person. Oftentimes, lenders will make their lending decision the same day you apply. If approved, you could receive funds within 24 hours of accepting the loan offer.
- Great for Emergencies: With quick funding times, payday loans are a great way to cover unexpected expenses. This is also true for other financing solutions like online installment loans.
And here are the major drawbacks to using payday loans:
- Short Repayment Terms: Payday loans typically come with a short repayment term of two to four weeks. These short terms make it tricky to pay off the loan on time.
- Lump-Sum Repayment: Usually, you’ll need to pay back the entire loan — plus any interest or financing charges — in a lump-sum payment. Because of this and the short repayment period, many people turn to installment loans instead. Installment loans have longer repayment terms and let you pay back what you borrowed over time.
- Small Loan Amounts: Although Texas payday loans have no maximum loan amount, most payday loans are for $500 or less. If you’re dealing with a larger expense, you might need to take out an installment loan with a higher loan limit to cover it.
- Additional Fees: Payday loans typically come with financing fees or charges. Texas has no upper limit on these fees, meaning you could end up with a more expensive loan than you expected. Some less reputable payday lenders also have hidden fees.
- No Credit Building: Payday loans rarely help you build credit. Failure to pay back the loan on time, however, can hurt your credit score. If you're looking to build credit, consider a direct lender installment loan instead.
Why Jora Credit?
Although payday loans are helpful in the face of emergencies, they are not the only option when you need quick cash. Here are some different types of loans to consider:
- Pawn Shop Loan: Another loan for bad credit is a pawn shop loan in Texas. These loans require collateral — such as a valuable electronic or a piece of jewelry — in exchange for cash. Like most payday loans, they do not require a credit check. You’ll typically have a short period to pay back the loan plus interest. Failure to do so could result in losing your item permanently.
- Title Loan: Title loans are also short-term loans that do not require good credit. You’ll need to put up your vehicle as collateral for funds, however. This means you could lose your vehicle if you do not repay the loan on time. You’ll also typically have a short period to pay back what you owe — usually around 30 days.
- Emergency 401(k) Loan: If you have a 401(k) plan, you may be eligible for an emergency 401(k) loan. With these loans, you can typically withdraw up to 50% of your account balance. You'll need to repay what you borrow, typically within five years of withdrawing the funds. You may also have to pay certain fees, such as origination fees.
- Family and Friend Loan: Asking a loved one for a cash loan could help in financial hardship, especially if you need quick cash and do not want to deal with expensive interest or other fees. Make sure both you and the person you’re asking are clear on the terms of the loan to avoid any problems down the road.
Another option is to apply for a Texas installment loan for bad credit. When you get one of these loans from a direct cash lender like Jora, you can expect lenient requirements, fast credit decision and funding times, and flexible repayment terms. You also do not have to worry about hidden fees.
In Texas, Jora offers installment loans up to $1,700. Apply for an installment loan today and if approved receive your funds as soon as the same or the next business day.*
You may want to get a payday loan if you need emergency money, need fast cash, or do not have good credit. Make sure you can reliably repay the loan on time, however, or you could face additional fees or penalties.
This depends on what you’re looking for. Both types of loans can be useful when dealing with emergencies. However, an installment loan from a direct lender like Jora might be better if you need a larger amount of cash fast but want a longer repayment term.
Most lenders offering installment loans do require a credit check. However, lenders like Jora will consider other factors — like your income — when deciding whether to approve a loan application. This means you could still qualify for a loan even with bad credit.