News About the Ever-Changing Payday Advance Industry
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Yes — payday loans are legal in Texas, and among the most expensive in the country. Texas caps interest at 10%, but payday lenders sidestep it by operating as a Credit Access Business (CAB): they broker a third-party loan and charge a separate fee that is not treated as interest and is not capped. The result is APRs that frequently top 500%. The OCCC licenses CABs.
| Status | Legal — via the Credit Access Business (CAB) model |
|---|---|
| Statutory rate cap | 10% constitutional usury cap — but CAB fees are not “interest” |
| CAB fee cap | None at the state level |
| Typical APR | Often 500%+ (state data: ~537% single-payment, ~488% installment) |
| Loan term | Commonly 7–31 days (single payment) or several installments |
| Rollovers | Not limited by state law; some cities restrict them |
| Local ordinances | Austin, Dallas, El Paso, Houston, San Antonio and others add limits |
| Regulator | Office of Consumer Credit Commissioner (OCCC) |
| Law | Texas Finance Code Ch. 393 (Credit Services Organizations) |
Payday lenders in Texas are licensed as Credit Access Businesses by the OCCC. To report a violation or an illegal lender, use the online complaint form.
Given the cost, weigh a credit-union payday-alternative loan, a nonprofit lender, an employer paycheck advance, or a hardship plan with the biller first. See our guide to payday loans and alternatives.
Texas is among the states that sharply restrict or bar wage garnishment for ordinary consumer debts, so even after a court judgment a lender's ability to take your pay is limited. Texas does not run a statewide payday-loan database, so limits on how many loans you can hold are harder to track from lender to lender. Your rights when you cannot repay are set by a mix of federal and state law — these guides explain how they work:
Disclaimer: general information, not legal or financial advice. Laws change — verify the current rules with the Texas Office of Consumer Credit Commissioner (OCCC) before borrowing. Last reviewed 2026.
Sources
Yes. They operate legally through the Credit Access Business model under Texas Finance Code Chapter 393 and are licensed by the OCCC.
Not at the state level. Texas's 10% usury cap does not apply to the CAB fee, so fees are effectively uncapped — though some cities impose their own limits.
They frequently exceed 500%. State market data has shown roughly 537% APR for single-payment payday loans and about 488% for installment payday loans.
Yes. Austin, Dallas, El Paso, Houston, San Antonio and others limit loan size, restrict rollovers, and require part of the principal to be repaid with each renewal.
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