Finding money online can be tricky in the Lone Star State. Let us help guide you through the process of receiving fast cash in TX.
Here is some important advice for anyone looking to find information on installment loans: Be careful. Not all of the articles out there are fact-based, and some are downright misleading. Some of the information is truthful, but there is also a lot of inaccurate and sometimes false information circulating around the internet. It's important that consumers know what's accurate and what isn't when looking for online installment loans because many scam websites use misleading information as a method to commit identity theft.
First, consumers need to understand the terminology around installment loans and how they're structured. The definition of "installment" means that a loan will be paid off in portions over time instead of in one lump sum at the loan's maturity date. For this reason, many traditional loans can be classified as installment loans because they are usually meant to be paid off in monthly increments that amortize both the principal and interest. Mortgages, auto loans, and asset-based business loans all work this way. But the specific online installment loans that consumers turn to usually have a maturity date of less than one year, and they often have a more simplified application process.
It's not uncommon to see installment loans categorized with and often confused with payday loans in Texas. But they shouldn't be because while both have the same kind of requirements for approval, there are stark differences. Online payday loans work the following way:
Installment loans in Texas usually work like this:
Some lenders do require biweekly payments for borrowers who receive biweekly paychecks. Both installment loans and payday installment loans fall under similar regulations.
An unsecured loan is one that the borrower can obtain without needing to offer any personal asset as collateral. Many traditional loans do require some form of collateral, be it a home, vehicle, valuable collectibles, or other assets. Since an installment loan is not directly borrowed against a vehicle like an auto title loan, the loan is riskier for the lender, which can translate to higher interest and fees for the borrower. But there are usually steps taken to make sure the borrower can make scheduled payments such as the following:
It should be noted, however, that lenders will not always run these kinds of checks. It is chiefly up to the borrower to determine their own loan worthiness. Remember, being approved for a loan does not ensure one’s ability to repay a loan.
One way borrowers can make sure they don't get scammed is by knowing Texas laws on installment loans. One of the main things they should be aware of is that most installment loan providers operating in Texas are not the actual company making out the loan. Instead, they're what's known as a Credit Access Business in Texas which is essentially a broker for another lender who offers the service to consumers. That's because Texas has some laws that do cap what regular consumer lenders can charge for loans that have more than 10 percent APR, or finance charges for loans exceeding $100. But when a lender registers as a CAB, they can get around some of these finance charge restrictions and thereby raise their APRs. But there are other guidelines that CABs providing online installment loans in Texas must follow as set forth by the Office of Credit Commissioner:
More information can be found on the OCC website, and consumers can also file a complaint with them if they believe a lender did not properly disclose certain charges or misled them in any way. If a consumer believes they've found an unlicensed or scam lender, they can also contact the state's Attorney General office.
One myth that has been advertised at times on the internet is that installment loans with no credit check exist, but they do not. High-risk loans like these that aren't secured often prompt the lender to check the borrower to see if they can make installment payments. A credit check will always be necessary. But what the lender usually will do is consider more than just a borrower's credit score, and in some cases, they may offer installment loans with bad credit if the borrower has enough income or supplemental income to make their payments. In general, poor credit doesn't automatically disqualify anyone from getting an installment loan, but those facing or about to file for bankruptcy are likely not to qualify. Usually, lenders are willing to work with a variety of credit scores.
Some brick and mortar installment loan providers are also direct lenders with application options on their website. You can search for online installment loan direct lenders through a local search, or you can check with the OCC on the validity of a lender's license. Keep in mind that some lenders have a national presence and some loan amounts advertised on their websites may not be the final amount you can borrow.