Austin Payday Loans
Apply for a loan online. Pay back the loan in monthly installments.
Borrowing Money in Austin
Access to credit can be difficult to come by for people with lower incomes and/or poor credit histories. More often than not, they find themselves working with a lender who doesn’t care whether they can actually repay the loan. These lenders are perfectly happy to repossess the borrower’s car, sell their stuff or put them into an aggressive collections process. In Texas, these lenders can even exploit a legal loophole to have people thrown in jail for defaulting on their loan. If all this sounds pretty awful, that’s because it is! And there’s a term for it: it’s called predatory lending. Here are some guides about what kind of lenders to avoid in the Austin area, as well as a recommendation for a better kind of personal loan.
Storefront Payday Loans in Austin
You could end up in jail if you can’t repay this high-interest loan.
The payday loan and auto title industry in Texas takes in about 5.8 billion dollars per year.
That’s a lot of money. But the real cost of these loans — with their high interest rates and short repayment terms — are felt by the borrowers.
Payday loans are rarely for more than a few hundred dollars and often have terms that are less than a month long. They are also incredibly easy to get, as many lenders don’t even check the borrower’s credit history. As such, they are often loaned out to people who have low credit scores and low incomes.
The problem with payday loans is their interest rates. In Texas, the annual percentage rate for a payday loan can be well over 500%.
People who pay the loan on time won’t have to worry about paying five times what they were loaned, but the people who do have trouble might run into something called “rollover”. This is when the payday lender offers to extend the term of the loan in return for charging them an additional fee. Rollover traps borrowers into a cycle of debt. The borrower keeps extending the loan and keeps owing more on it until finally they owe far more than they could possibly repay.
Loan rollover is banned in many states, but it’s legal in Texas.
Furthermore, Texas state law even allows lenders to have people arrested when they default on their payday loan.
If you would like to file a complaint against a payday lender in Austin, contact the Texas Office of Consumer Credit Commissioner at (800) 538-1579 or the Consumer Financial Protection Bureau at (855) 411-2372.
See more local Texas Subprime Reports below:
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