Payday Loans Houston
Why Use a Payday Loan Service?
Payday loans come with exorbitant interest rates and very short terms. The way they work is that a lender loans you funds until your next paycheck, at which point a single payment for the principal plus interest and fees is due. While payday loans may seem like a good idea to avoid high late fees or reconnection charges that come from not paying a bill, they are extremely risky.
The interest rates for payday loans are extreme. Lenders justify these rates because the normal term for a payday loan is generally short, and rates represent interest on a full-year loan. The problem many borrowers face is that they are not able to pay off the large loan amount in one lump sum on their next payday. Most services offer renewals or rollovers, which provide more time to pay off the loan but also mean that interest continues adding up and high rates start making a noticeable difference.
While we do not recommend you take out a payday loan, we do recommend you get all the information you can if you decide you want one. We urge you to look into the lender before you agree to anything because many payday loan companies are the subject of lawsuits and investigations for illegal practices, and some have been fined for shady practices or customer harassment.
If we discover illegal lending or questionable practices in a service we review, we remove it from our lineup to ensure it represents the best choices available. However, it is wise to learn everything you can about the specifics of a company and loan before you agree to its terms. Houston payday loan services – including our top three of Check 'n Go, Speedy Cash and Cash Store – connect you with third-party lenders to help you find the right payday loan, so be sure you look into the lender as well as the company connecting you with it.
Payday Loan Companies: What to Look For
Because of the high interest rates and short terms before payment is due, it's important to know the ins and outs of your payday loan. Texas laws regulate certain aspects of payday loans, and you can read our articles on payday loans in Houston to learn about the process in your area. There are no direct lenders in Texas, so any service you decide to use will connect you with a third-party lender to complete your loan. The following is the criteria we used in reviewing and ranking services available for payday loans in Houston.
The loans features include some of the most important aspects of your loan: the amount, interest rates and associated fees. On July 1, 2014, laws in Houston went into effect limiting the maximum amount of a payday loan to a percentage of an applicant's total monthly income. All services must obey these new laws. Generally, lenders don't approve you for the maximum amount on your first loan. In the end, the exact amount is in the hands of the lender financing your loan, as long as it does not exceed the legal limit. Keep in mind that you do not have to – and should not – accept a loan larger than you need.
All services charge a high APR, which lenders often refer to as a cost per $100 borrowed. As far as the interest rate or APR is concerned, the figures are always high, which makes payday loans particularly risky. Those high rates add up quickly, especially if you end up extending your loan. If you need an extension or a loan rollover, interest will continue to accrue at these extreme rates. Some services offer lower APRs, but usually only after time and good payment history.
Ease of Use
When considering the ease of use for a service, we looked at the process by which you apply for a loan and how you receive your funds. Most services allow you to apply online, and most services we reviewed have payday loan stores in Houston, TX. However, some of the services on our lineup offer loans only online or only in-store, so you want to make sure you know what each service offers.
Most payday loans are designed to be short-term supplements to your income; they are not meant to be long-term financial solutions. Their purpose is to help you make it to your next paycheck. In Texas, the term for a payday loan varies, and some services may offer longer terms on loans if those loans are not technically payday loans. Cash advances and installment loans have different regulations, despite working in very similar ways. The important thing to keep in mind is that you are paying interest on your loan for the duration of the term, so it is in your best interest to pay it off as quickly as possible and not accept a term longer than you need.
If you cannot make your payment on time, you may be eligible for an extension or a loan rollover. You need to talk to your lender to determine your eligibility, and it is ultimately left up to their discretion. Any extension or rollover may come with additional fees, terms or commitments, and interest will continue to accrue, so you want to make sure you understand what you are agreeing to before you accept any rollover or extension.
Help & Support
When it comes to your finances – especially when you are in the position where you need a payday loan – having ample help and support is invaluable. Most services provide a telephone number for support so you can talk directly with a representative. Most services also have an email option; however, our experiences contacting lenders via email was very disappointing; very often we didn't receive responses to our email inquiries. Most services on our lineup have local Houston branches, which means you can talk face-to-face with an actual person when you need to.
If the time comes that you need a payday loan and you have exhausted all other options, you want to know what to look for and what to avoid in a payday loan service. Because of high interest rates, fees and short terms, payday loans can be risky, so your best option is to go into the loan process as educated as you can be.