Payday Loans Houston
Why Use a Payday Loan?
A payday loan by any other name is still a payday loan, so whether it's called a cash advance or a short-term loan, you should expect to pay extremely high interest rates. If it's an emergency and you need cash immediately, a payday loan could be your only option. Over the past years, we've spent more than 600 hours researching and reviewing payday loan companies to weed out the sketchy ones and highlight the best payday loans available in Houston. To learn more you can read our articles on payday loans in Houston to learn about the process in your area.
Best for Online Payday Loans: LendUp
Going to a storefront to apply in person isn't always an option, so finding payday loans in Houston online is a huge benefit for some people. You should look for a direct lender like LendUp. It offers rates that are comparable to other lenders, and you can see the fee schedule on the website. Be aware that not all online payday lenders are what they seem to be — many are lead generators that try to pair those in need of emergency cash with potential lenders, and all you're signing up for is dozens of phone calls from other lenders.
Best for Flexible Terms: Fig
Most payday loans work off a typical payday schedule, so you're expected to pay back the money you borrowed, plus the interest, in 14 days. Some payday advance companies, like Fig, offer longer term limits, which allows you to pay back the money over several months. Also, the best payday loan companies in Houston won't penalize you for paying your loan off early.
Best for Unemployed Persons: Check 'n Go
When you need cash immediately and you're not currently working, it can be nigh impossible to get a loan or a credit card. You can find a handful of payday loan companies that lend money even if you're collecting social security or disability benefits. As long as you have an income or you're receiving government benefits and you can offer proof, like in the form of bank statements, you will qualify for a payday advance from Check 'n Go.
Best for Return Customers: Rise
Although payday advances are expensive and should only be used in emergencies, you may anticipate the need to use these loans more than once. If so, you should choose a company that can offer you lower annual percentage rates (APR) as you pay successfully on your first loan. Plus, with Rise, you aren't required to pay any extra fees if you pay your loan off early.
Best for Same-Day Loans: Cash Store
There are emergencies that require cash right now – not the next business day – and in those dire circumstances, you may need to turn to a loan company like Cash Store. This loan company offers installment loans and title loans. To get your money the same day you apply, you need to get a title loan, which means offering your car as collateral. Depending on the value of your car, you could borrow thousands in cash immediately, but this also puts you at risk of repossession of your car if you fail to repay the loan.
Payday Loans in Houston: What You Need to Know
Payday loans are subject to strict federal and state regulations that vary based on your location. There are also local municipal regulations that may apply even more rules. In Houston, a payday loan must not exceed 20 percent of your gross monthly income. Title loans have stricter rules: You can only borrow up to 3 percent of your gross annual income or 70 percent of the value of your car – whichever is the lower amount.
Example of Houston's limits:
- Borrower makes $30,000 annually; $2,500 monthly
- Payday advance max: $500
- Title loan max: $900 (based on annual income)
If you want to refinance your loan, in Houston you have to meet certain prerequisites. You are required to pay down the principal by 25 percent before you can refinance. Plus, if you decide to rollover multiple times, you're limited to three total for a single loan.
Additionally, if you choose an installment loan, it must be repaid in no more than four payments, which means you cannot get flexible terms with a local payday loan, unless you choose to rollover. It’s also important to note, Houston doesn't put restrictions on loan APRs, so in spite of the regulations, these are small-dollar loans at a high cost.
Borrower Beware: Payday Loans Can Lead to Bad Credit
There's no credit check with most payday loans because credit only plays a role if you miss a payment. The biggest risk with payday loans is that you could get stuck in a cycle of borrowing money to pay bills, and then come payday, you need to borrow again to pay off your loan. With each loan you take out, you're agreeing to pay high interest rates for the ability to borrow. If, at some point, you fail to make a payment to the payday loan company you borrowed from, they could report the action to credit agencies.
Unfortunately, the loan companies typically only report on defaults, rather than when you make payments on time. So, the only way for your credit to be affected in this case is negatively. If you need a loan to pay bills, you may be able to borrow from a local credit union or regional bank, which offers much lower APR and flexible terms for the loan. Plus, many credit unions and banks report your account activity, good or bad, which could lead to good credit for you.
CSO & CAB: What Are They?
Payday loan companies in Houston must register as Credit Services Organizations, or CSOs. Another licensing option is Credit Access Business, or CAB. In both cases, the companies that register with these offices must work with third-party lenders, and then you're subjected to fees labeled CSO fee or CAB fee on top of your APR. Simply put, most companies you work with for quick, small cash loans are middlemen for the actual lenders. So, even if you find a payday loan company that has a low APR compared to the industry average of 391 percent, for a 14-day loan, you may be paying double the interest when you factor in the CSO or CAB fee.
- Loan Company XYZ offers: $300
- Loan length: 4 months
- APR: 190%
- CAB fee: $121.19
- Interest charge: $6.25
Although a small loan company could claim the total repayment amount is $427.44, the total including all of the fees comes to $554.88. That means you'd be paying back almost twice as much as what you borrowed.
Payday loans are, at times, a necessity when you have no credit or bad credit. You can get the cash you need to pay bills or an unexpected expense. It's vital you understand that these loans come with extremely high interest rates and extra fees, and it could be difficult for you to pay off what you owe without having to borrow again. Payday loans in Houston are strictly regulated for your protection, but you still risk overdraft fees, late fees and damaging your credit score if you cannot make loan payments on time.
It's far better for you to find an alternative solution to a payday loan, but if you're in Houston and you need cash soon, the lenders we've suggested here offer payday advances, title loans and installment loans that offer comparable APR to the industry standard, clearly stated fees, and customer service that's friendly and easily accessible.