Texas Payday Loans: Subprime Report

At a Glance
Texas, USA
  • Nickname: The Lone Star State
  • Population: 28.7 Million
  • Capital: Austin
  • Website: texas.gov
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If you remember the song that goes “the stars and stripes are big and bright, deep in the heart of Texas!” you already know that Texas is one proud state. While many states continue to struggle with high rates of poverty, the Lone Star State has seen marked improvements since 2008. In fact, the Texas poverty rate fell from 17.2% in 2014 to 14.7% in 2018. On top of a falling poverty rate, Texas has—as of September 2019—successfully lowered their unemployment rate to 3.4%, which is just below the national unemployment rate of 3.5%.

Unfortunately, though, many Texans are still struggling with debt and are having a hard time making ends meet. The 2018 Texas median household income was $60,629, and the average credit card debt was $6,611. Adding loan payments on top of the essentials can be a burden on many residents.

As a result, Texans might turn to the high interest rates and the type of supposedly “fast cash” they think they can get from payday loans and title loans. But if you’re looking for ways to make ends meet, don’t fall for a destructive payday or title loan in Texas.

Average Credit Card Debt and Median Household Income in Texas vs. the U.S.
Average Credit Card Debt (Q1 2019)
Median Household Income (2018)

Payday Loans in Texas

People sometimes turn to payday loans when they’re struggling with their finances and can’t find anywhere or anyone else to help them out. Payday loans often provide small amounts of money (typically less than $500) that are charged at very high annual percentage rates (APRs) and are due within short periods of time (usually around 2-4 weeks). Fees are also tacked onto these loans. In fact, Texans pay some of the highest payday loan fees in the country. Payday loans are particularly dangerous because they’re so hard to pay back within the short time frame. Borrowers of payday loans often find themselves taking out additional loans and refinancing their loans just to be able to pay the payday lender back.

When it comes to payday loans in Texas, it’s almost like being in the Wild West—there’s nothing to regulate lenders. Individual cities work hard to protect their residents, but payday lenders in Texas continue to take short cuts and find loopholes that allow them to charge very high rates.

And not paying back a payday loan in Texas has left some borrowers scrambling to just get back the lives they had before. Reporting by the Texas Observer states that at least 1,700 payday lenders have “filed criminal complaints against customers in San Antonio, Houston and Amarillo”, and some borrowers have even ended up in jail for non-payment (even though criminal prosecution for debt non-payment is not supposed to happen in Texas). According to Texas Appleseed, a non-profit in Texas that fights to “promote social and economic justice for all Texans”, 13 different payday loan companies were working to criminally charge its non-paying borrowers in 8 different counties (as of December 2014). So, it’s really important to think twice before borrowing a payday loan in Texas.

According to 2012 data from the Consumer Financial Protection Bureau, Texans tend to borrow higher amounts of money and pay significantly more in fees for payday loans than folks living in other U.S. states ($468 vs. $392, respectively, for an average loan; $22.85 vs. $14.40, respectively, in fees).

Title Loans in Texas

Payday loans in Texas are a problem. But what about title loans? Unfortunately, Texas title loans are just as predatory and just as unregulated.

If you don’t know how a title loan works, it’s probably best to steer clear. Title loans require borrowers to provide their vehicle title to lenders, who are allowed to repossess the vehicle if the loan doesn’t get paid back in time. And like payday loans, title loans come with very high APRs and fees.

According to Texas Appleseed, the non-profit that works to provide protection to consumers in the state, title loans are, unfortunately, on the rise. There were twice as many title loans taken out in 2015 as compared to 2012, representing an increase of over 110%! The average amount for a title loan was over $1,300 in 2015, also a notable increase from 2012 figures, though the typical APR was slightly lower than 2012 through 2014. Title loan fees are growing as well (at a rate of 225% during the 2012-2015 period).

Single Payment Auto Title Loans


Average Loan Term (Days)

Average Fees per $100

Average Loan Amount

Average APR

% of Borrowers Who Refinance

Average Quarterly Refinances

Refinances as % of All Loan Transactions

Ave. Total # of Refinances For Borrowers Who Refinance

Total # of Repossessions (% of Borrowers)














28,744 (10%)














31,990 (10%)














40,799 (16%)














34,576 (19%)

Source: Texas Appleseed: https://www.texasappleseed.org/sites/default/files/Payday-Auto-Title-Lending-Tx_MktOv-Trends2012-2015Rev.pdf

The Texas Appleseed organization also notes that 1 in 7 title loan borrowers lost their vehicle to repossession in 2015 (see figure below).

Consumer Protection in Texas

When you’re strapped for cash during difficult times, it can be hard to pull yourself out of the hole you’ve created (it happens to a lot of people). So, you’re short on rent or you had an emergency where you needed more money than normal, so what do you do?

Many people might turn to payday loans or title loans in Texas because they’re “easy cash” and there are stores all over the state. But be warned: you definitely need to do your research before you take out a Texas payday loan or title loan.

If you’ve already taken out a payday or title loan in Texas, you do still have options. Don’t put up with predatory lenders—speak up and reach out.

How to Report a Predatory Lender in Texas

For assistance in Texas with payday loan or title loan problems, consumers can contact the Texas Office of Consumer Credit Commissioner by calling their hotline at (512) 936-7630 or by emailing consumer.complaints@occc.texas.gov. It is important not to let scammers or predatory lenders take advantage of you—reach out and get help.

The Texas Office of Consumer Credit Commissioner

Guides to Payday and Title Loans in Texas Cities

You know payday and title loans in Texas are a problem. But what about at the city level? Check out these payday and title loan guides for the following cities in Texas…

Arlington | Austin | Dallas | El Paso | Fort Worth | Houston | Irving | Killeen | McAllen | Plano | Round Rock | San Antonio | Tyler | Waco

Works Cited