Personal Loans in Texas: What Licensed Lenders May Charge

How the Texas rate tiers work

Chapter 342 gives a licensed lender more than one way to price a loan, among them add-on interest under Section 342.201(a) and a true annual rate under Section 342.201(e) that falls as the loan grows. This page follows the Section 342.201(e) method. Each part of the cash advance carries its own maximum rate, so a larger loan has a lower blended rate.

The dollar break points are adjusted every year with consumer prices and published by the OCCC in the Texas Credit Letter; the amounts above apply to loans made on or after July 1, 2026. The lender may also charge an administrative fee. Section 342.201(f) sets a base amount and Section 342.201(g) lets the Finance Commission set a higher maximum by rule; the OCCC announced that maximum as $130 in February 2026. Because the fee counts as a finance charge, the APR on your Truth in Lending disclosure will be higher than the contract rate.

How Texas compares with its neighbors

On the National Consumer Law Center's comparison of a $2,000 two-year loan, Texas sits in the middle of its region. Arkansas caps that loan at about 17% APR and New Mexico at 36%, while Louisiana allows about 38% and Oklahoma about 56%. If you live near a state line, the lender's license and your state of residence decide which rules apply, not where the lender is based. The state rules map shows every state side by side.

Who needs a license and who does not

A business that makes, transacts or negotiates consumer loans above the rates Texas allows unlicensed lenders must hold a regulated lender license from the OCCC. Online lenders that lend to Texans directly under state law are licensed the same way as storefront finance companies.

• Banks and credit unions answer to their own charters and banking regulators instead, and a bank may charge the rates its home state allows.
• Online lenders that partner with a bank may make loans through that bank, which can put the loan outside the Texas tiers. Ask who the lender of record is.
• Payday and auto title loans are arranged by credit access businesses under Chapter 393, a separate set of rules. Our sister site Lendmira covers them on its Texas lending laws page.

Paying early and other borrower rights

Section 342.453 requires the lender to accept payment of the loan in full at any time during regular business hours, and a partial prepayment equal to one or more full installments. On a simple-interest loan you stop paying interest on the balance you repay; on a precomputed loan, Section 342.351 and the sections after it require a refund or credit of the unearned interest. The administrative fee is different: Section 342.201(f) treats it as earned when the loan is made and not refundable.

A licensed lender must give you the federal disclosures before you sign and may not misrepresent the terms. If a lender asks for a fee before it will approve or fund the loan, treat it as a warning sign; how to verify a lender explains what to check.

Check a lender and file a complaint

1. 1 Look up the license in the OCCC's license search, by the company's name, before you apply.
2. 2 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees.
3. 3 Complain to the OCCC online or by phone at (800) 538-1579 if a licensed lender breaks the rules; it handles complaints about regulated lenders.
4. 4 Send a complaint to the CFPB as well if the lender is a bank or a bank partner, or if you are unsure who regulates it.

Questions people ask