Payday loans are useful services that come to the aid of many people who find themselves in need of extra money in order to make it through a month. The loan involves being given a certain sum of money (typically, a certain percentage of your salary) to the borrower for a short period, with the loan liable to be repaid once the borrower gets hold of sufficient funds for themselves. In order to be able to draw a payday loan, you must be working and receiving a pay check at the beginning or end of each month.
1. Make sure your lender is licensed.
For any payday loan that requires an interest of rate more than 10% per annum, the state of Texas loan guidelines requires the lender to have a state license. If your lender does not have this license, then they are ineligible to lend you money and the state laws would not apply to you if the loan comes under any discrepancies. Therefore, it is very important that you make sure you’re drawing your loan from a licensed lender.
2. Provide them a Security Check
The state requires you to provide your lender with a security check of the amount of money they lent you plus the fees they charge plus the interest on your loan over the given period of time. This check would act as a security in case you do not repay the loan on time, in which case the lender would simply liquefy your check and get their money back. You are required to address the check to the lender’s company name and date it the exact day on which the loan is being drawn. Here are a few things that you need to learn about texas state lending regulations before you make your move.
3. Have a written agreement
This is the most important part of the loan. To make sure that all relevant rules are followed and the whole thing is done on a legal basis, the basic terms and conditions of the loan need to be written down on a piece of paper and duly signed by the lender and the borrower. The document has to contain the names of both the lender and borrower, the amount of money that is being drawn, the amount on the check, and the earliest date at which the check can be liquefied.
4. Pay it back on time!
The state of Texas loan regulations clearly states that in the event the loan does not get repaid on the due date even by means of the security check (this can happen if the check bounces due to low funds on the account, a stop payment notification from the borrower, a closed or non-existent loan account and so on), the lender has the right to pursue the case in civil court to get their refund from the borrower. Therefore, it is advisable to always pay back your loan on time.