Borrowing $200–$5,000 in Texas
Texas is the largest payday and auto-title market in the country because its law has no rate ceiling for loans arranged through credit access businesses. In the fourth quarter of 2024 the average fee on a single-payment payday loan reported to the state regulator was $27.38 per $100 borrowed, and the state's own mandated disclosure puts the average payday APR at 415%. Installment payday loans averaged $125.88 in fees per $100 over their term.
For $200–$5,000 the realistic alternatives are a Texas credit union (18% federal cap, many with small-dollar programs), a national online lender (most cap at 35.99% and many approve scores in the high 500s), or a licensed Chapter 342 lender for borrowers who need a storefront. More than 45 Texas cities, including Austin, Dallas, Houston and San Antonio, have ordinances limiting payday loans to 20% of gross monthly income and four installments.
The national picture for context: the average bank personal loan rate was 11.90% in August 2026 (Federal Reserve G.19), credit cards averaged 22.36%, and federal credit unions are capped at 18% everywhere. State law matters most at the small end, where it decides whether a $500 loan costs $8 or $75 for a month.
What you can borrow in Texas, by amount
| Amount | Where Texas borrowers can get it | Note |
|---|---|---|
| $200 – $500 | Credit-union PAL or small-dollar loan; earned-wage access; a card | Avoid the CAB storefront: $500 for two weeks costs about $137 in fees |
| $500 – $2,000 | Credit union; Upgrade, Upstart or Happen Bank (from $1,000); OneMain by branch | City ordinances cap payday amounts at 20% of monthly income inside major cities |
| $2,000 – $5,000 | Online lenders (Avant, Best Egg, Prosper from $2,000); credit unions; Chapter 342 licensed lenders | Compare the all-in APR; Subchapter F loans can be far costlier than an online offer |
Lender minimums from our lender reviews (October 2026): Upgrade, Upstart and Happen Bank from $1,000; OneMain from $1,500; Avant, Best Egg and Prosper from $2,000; Discover from $2,500; LightStream and SoFi from $5,000. Availability varies by state and changes; confirm on the lender's site.
Texas small-loan laws at a glance
Texas sets no APR cap on CAB payday and title loans; licensed lenders under Chapter 342 use tiered rate schedules, and small Subchapter F loans can exceed 100% APR. Usury rule: 10% constitutional default where no statute applies; Chapter 342 and Chapter 393 provide the exceptions lenders use.
| Product | Rule in Texas | Notes |
|---|---|---|
| Payday loans | Legal; no fee or APR cap; arranged by CABs licensed by the OCCC | Avg fee $27.38 per $100 (single payment); refinancing common |
| Auto title loans | Legal; no cap; vehicle can be repossessed | Avg fee about $18.52 per $100 per month (single payment) |
| Licensed installment lenders | Fin. Code ch. 342: tiered rate schedules; Subchapter F small loans allow acquisition + handling charges | APRs from ~18% on larger loans to well over 100% on small Subchapter F loans |
| City ordinances | 45+ cities limit payday/title loans to 20% of gross monthly income (title: 3% of annual income or 70% of car value) and 4 installments | Applies only inside city limits |
| Credit unions | Federal credit unions capped at 18%; PALs at 28% | Texas has 400+ credit unions |
| Military borrowers | 36% MAPR cap under the federal Military Lending Act | Texas has one of the largest active-duty populations in the country |
State law governs non-bank lenders. Banks and federal credit unions follow federal rules, which is why a bank credit card can exceed a state cap while a state-licensed lender cannot. Laws change; the "verified" date above is when we last checked the statutes and regulator guidance cited in the sources.
What a $1,000 loan costs in Texas, by source
Same $1,000, repaid over 12 months where the product allows it. Our amortization math at the ceilings described above; your rate depends on credit and may be far lower than a ceiling.
The order rarely changes: a credit union first, a national online lender or licensed installment lender second, and the payday product, where Texas allows one, a distant last. For $2,000–$5,000 the comparison is mostly between online lenders and credit unions; use the payment calculator with the APR from a pre-qualified offer.
Where Texas residents can borrow $200–$5,000
- A Texas credit unionFederal credit unions are capped at 18% and can make payday alternative loans of up to $2,000 at no more than 28% with no membership waiting period (PAL II). Find one you can join by county, employer or association with the NCUA locator. State-chartered credit unions follow Texas law and are usually priced similarly.
- A national online lender that lends in TexasPre-qualify with two or three using soft inquiries. For $1,000–$2,000, Upgrade, Upstart and Happen Bank; for $2,000–$5,000, add Avant, Best Egg, Prosper and Discover. Offers show the APR with any origination fee included. See our lender reviews and bad-credit guide.
- A Texas-licensed installment lenderStorefront and online lenders licensed by the Texas Office of Consumer Credit Commissioner must stay within the caps in the table above. Useful for borrowers who want in-person service or cannot get an online approval; ask for the APR and total of payments in writing before signing.
- Your existing creditors and employerBefore borrowing at all: hardship plans from utilities, landlords and card issuers cost nothing, and many employers now offer earned-wage access at little or no cost. Our emergency loan guide ranks every option by cost.
Your rights as a Texas borrower
- CABs must give you an OCCC-prescribed disclosure showing the APR, the cost of refinancing and how the loan compares with other credit, before you sign.
- Inside cities with a payday ordinance, a single-payment loan cannot exceed 20% of your gross monthly income and installment loans must repay at least 25% of principal per installment.
- Complaints about any OCCC licensee can be filed at occc.texas.gov or by calling (800) 538-1579; the OCCC publishes the lender's license status online.
Federal protections apply on top of state law: the Truth in Lending Act requires the APR, finance charge, amount financed and total of payments in writing before you sign; the Equal Credit Opportunity Act requires a written reason if you are declined; and the Military Lending Act caps loans to active-duty servicemembers and dependents at 36% MAPR nationwide.
How to check a lender is licensed in Texas
- State regulatorTexas Office of Consumer Credit Commissioner (OCCC), (800) 538-1579. Licensee lists and complaint forms are on the site.
- NMLS Consumer Accessnmlsconsumeraccess.org lists most state-licensed non-bank lenders with their Texas license status and history.
- Banks and credit unionsFDIC BankFind and the NCUA locator. Many online lenders issue through a partner bank named in the loan agreement.
- Scam signalsGuaranteed approval, any fee before funding, payment by gift card or wire, or terms above Texas's caps. Our scams guide covers the rest.
Texas personal loan questions
Are payday loans legal in Texas?
Yes, and Texas is one of the few states with no cap on what they cost. Lenders operate as credit access businesses under Finance Code Chapter 393; the OCCC reported an average fee of $27.38 per $100 on single-payment payday loans in late 2024, roughly a 415% APR. Many cities limit loan size and the number of installments, but not the price.
What is the maximum interest rate on a personal loan in Texas?
For licensed lenders under Chapter 342 it depends on the loan size and subchapter: larger "Subchapter E" loans use a tiered schedule of roughly 18%–30%, while small "Subchapter F" loans allow acquisition and handling charges that can push APRs above 100%. Payday and title loans through CABs have no cap at all. Federal credit unions are capped at 18%, and most national online lenders cap themselves at 35.99%.
Where can I get a $1,000 loan in Texas with bad credit?
Start with a Texas credit union (PAL II loans up to $2,000 at no more than 28% APR, no waiting period), then online lenders that approve lower scores and lend from $1,000: Upgrade, Upstart and Happen Bank. OneMain lends from $1,500 through more than 100 Texas branches. All are far cheaper than a CAB loan.
Sources
State statutes and regulator publications as of November 1, 2026. We re-verify each state page after every legislative session and when a regulator announces a change. This page is general information, not legal advice; the regulator listed above can confirm current rules.
- Texas Office of Consumer Credit Commissioner, Credit Access Business Quarterly Data Report, Q4 2024 (average fees per $100). occc.texas.gov
- Texas OCCC, CAB consumer disclosure forms (average APR figures), rev. 2024. occc.texas.gov
- Texas Finance Code, Chapters 342 and 393. statutes.capitol.texas.gov
- Texas Municipal League, model payday/auto-title lending ordinance and adopting cities. www.tml.org
- National Credit Union Administration, federal credit union interest-rate ceiling (18%) and Payday Alternative Loan rule (28%). ncua.gov
- Federal Reserve G.19, October 7, 2026 (national personal loan and credit card averages). federalreserve.gov
- Lender minimum amounts and state availability as verified for our lender reviews, October 2026.