In a NutshellTexas payday loans are largely unregulated by the state’s government, so there’s no limit to the fees and interest rates lenders can charge unless your local municipality has passed its own rules. If you need money to cover an emergency expense, here are some other options that could help you save on interest or fees.
If you live in Texas and need emergency cash, you may be considering a payday loan.
The state of Texas doesn’t cap interest and fees on payday loans — though some local municipalities have stepped in to create regulations. That means you may pay a steep price for taking out a payday loan in the Lone Star State.
The average payday loan interest rate in Texas is more than 660% — one of the highest in the country, according to a 2021 analysis by the Center for Responsible Lending. If you borrow $500 at that rate, you’d have to repay about $627 in 14 days to satisfy the debt.
If you need money for an auto repair or other emergency expense, there are several alternatives to payday loans in Texas — and they may have significantly lower interest rates and longer repayment terms, which could help make the debt more manageable.
We’ve rounded up our top choices and highlighted the features we think you’ll find most useful. Keep reading to see if one might be right for your situation.
- Figloans: Good for building credit
- OneMain Financial: Good for co-applicants
- Earnin: Good for early access to your paycheck
- Personify: Good for long loan terms
- OppLoans: Good for emergency loans
Figloans: Good for building credit
Why you may want to consider Figloans: Based in Houston, Figloans offers a payday loan alternative in eight states, including Texas. Fig reports loan payments to the three main credit bureaus, which could help you build credit with on-time payments. That can be a major advantage over a payday loan, since payday lenders don’t typically report your payments to the credit bureaus.
Fig offers two consumer loans: a personal loan and a credit-builder loan. Fig recommends its personal loans for emergency needs. Here are some things to know about Fig’s personal loan, which it refers to as the “Fig Loan.”
- High rates — While Fig loans have APRs well into the triple digits and are much more expensive than an average personal loan, they still may be significantly cheaper than many Texas payday loans.
- Loan amounts — The company offers personal loan amounts ranging from $300 to $750 if you’re new to its platform, though you may be able to borrow more over time or through one of Fig’s partner lenders.
- Repayment terms — Figloans offers loan repayment terms between four and six months — though loan terms may be extended without additional fees and interest.
- Eligibility — To be eligible for a Fig loan, you’ll have to meet several criteria, including having a bank account with at least three months’ worth of transactions, at least $1,400 in monthly income and a positive bank account balance.
Read our Figloans review to learn more.
OneMain Financial: Good for co-applicants
Why you may want to consider OneMain Financial: OneMain offers personal loans of up to $20,000 in Texas. Interest rates vary depending on your credit, but even the lender’s highest rates are much lower than a typical payday loan’s interest rates. The lender also offers longer repayment terms than a typical payday loan. And you can apply with a co-applicant, which may help improve your chances of being approved or getting a lower rate.
- Loan amounts — OneMain typically offers personal loans ranging from $1,500 to $20,000. (And keep in mind that the lender may offer different terms if you apply through Credit Karma.)
- Origination fee — OneMain Financial charges an origination fee, which may be a flat amount or range from 1% to 10% of the loan amount, depending on where you live.
- Prequalification application — Before you apply for a short-term loan like a payday loan, it may make more sense to see if you prequalify for a personal loan from OneMain since checking your potential rate won’t hurt your credit scores. Just remember that if you officially apply, OneMain may perform a hard inquiry, which could lower your credit scores by a few points.
Read our OneMain Financial personal loan review to learn more.
Earnin: Good for early access to your paycheck
Why you may want to consider Earnin: Rather than providing traditional payday loans, Earnin allows you to receive an advance of $100 on your next paycheck for time already worked. As you continue to use the app and repay Earnin, the cash advance amount could increase to $500. The cash is then deducted from your bank account on your next payday. Earnin doesn’t charge fees or interest, but does ask users to provide tips voluntarily.
- Funding time — If you have the app’s Lightning Speed feature, Earnin says that once you’re approved, your advance will be deposited in your bank account within minutes. Otherwise it can take up to two business days to receive your money.
- Overdraft warnings — Earnin offers overdraft warnings known as Balance Shield Alerts if your account balance falls below an amount you specify, between $0 to $400. If your bank account balance drops below $100, you can also opt for the Balance Shield Cash Outs feature, which will send you up to $100 of your paycheck earnings early.
- Eligibility — To qualify for Earnin, you need to have at least 50% of your direct deposit sent to a checking account. You’ll also need to have a regular pay schedule, such as weekly, biweekly or monthly, and work at a fixed location or use an online timekeeping system for your hours.
Read our Earnin app review to learn more.
Personify: Good for long loan terms
Why you may want to consider Personify: Personify says it considers more than your credit history when you apply. Rates and loan terms differ based on where you live, but this lender could be a more appealing option than a payday loan. For example, in Texas, Personify offers loan terms of 12, 18, 24, 36 months or 48 months and loan amounts ranging from $500 to $15,000. (The lender may offer different terms on Credit Karma.)
- High interest rates — Personify’s APRs can vary widely in Texas. Its lowest starting rates are comparable to OneMain’s lowest rates, but its highest rates reach well into the triple digits. Though Personify is still likely a better option than a typical payday loan, you should only take out a Personify loan if you’re confident you can pay it back quickly and on time.
- Origination fee — Personify charges a 5% origination fee in Texas, which is added to your loan amount.
- Prequalification option — Personify doesn’t disclose its credit criteria, but you can apply for prequalification with a soft credit inquiry to see your estimated rate. Keep in mind that if you want to move forward with an offer, Personify may perform a hard credit inquiry that could affect your credit scores.
Read our Personify Financial review to learn more.
OppLoans: Good for emergency loans
Why you may want to consider OppLoans: OppLoans bills itself as an alternative to payday loans. The company offers personal loans of up to $4,000 for first-time borrowers in Texas, so it may be a good option if you need more than a few hundred dollars to deal with a financial emergency. If approved, your funds could be deposited in your bank account in as little as one business day.
- High interest rates — OppLoans interest rates are very high — in the upper double digits and triple digits. But they’re still better than what you’ll find at a typical payday lender if that’s the alternative you’re considering.
- Repayment terms — In Texas, OppLoan’s loan terms typically range from nine to 18 months.
- Eligibility — You must be at least 18 years old to get a loan, unless you live in Alabama or Nebraska, where the minimum age is 19.
Read our OppLoans review to learn more.
How we picked these alternatives
Getting access to cash for an emergency can be challenging if your credit is less than perfect. This is one of the reasons payday loans might seem attractive, despite their predatory nature.
To come up with other options, we looked for lenders in Texas that position themselves as payday loan alternatives or say they may lend to people with bad credit. When choosing lenders, we focused on factors such as how quickly loans are funded, loan amounts, fees, interest rates, the ability to apply for prequalification, loan terms and lender transparency.
If you need a small loan, you also may want to consider a payday alternative loan, which is offered by certain federal credit unions. The fee to process your application can’t be more than $20, and interest rates are capped. You could also check the APR of any existing credit cards to see if that’s a more affordable option.