Payday loans are marketed as quick cash, but the cost is easy to miss. This guide summarizes two Consumer Financial Protection Bureau (CFPB) pages and the Texas Office of Consumer Credit Commissioner (OCCC) consumer page. It names no lenders and recommends none. It is general education, not financial or legal advice.
By the Exsura Team · October 17, 2026
The CFPB says “While there is no set definition of a payday loan, it is usually a short-term, high-cost loan, generally for $500 or less, that is typically due on your next payday.” It lists common features: relatively small amounts, relatively short terms (the due date is typically two to four weeks from when the loan was made), authorization for automatic repayment, and no credit check or financial check. On that last point it says payday lenders do not generally verify your ability to repay the loan while meeting your other financial obligations.
The CFPB says many state laws set a maximum for payday loan fees, ranging from $10 to $30 for every $100 borrowed. It gives an example: “A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent.” By comparison, it says APRs on credit cards can range from about 12 percent to about 30 percent.
The CFPB also says some state laws permit lenders to roll over or renew a loan when it comes due so that you pay only the fees and the lender extends the due date. For how interest builds on cards, see how credit card interest works.
The CFPB explains that an Automated Clearing House (ACH) authorization is a payment authorization that gives the lender permission to electronically take money from your bank, credit union or prepaid card account when your payment is due. It says you can revoke this authorization and that you may choose to refuse to sign it. It also says that under federal law lenders cannot condition a payday loan on obtaining an authorization for preauthorized (recurring) electronic fund transfers.
The CFPB’s tip: “Be sure that you can afford to repay the loan.” It says if you do not have enough money in your account when the lender attempts a withdrawal, the loan will be delinquent, which might lead to a late fee from the lender and a bounced check or non-sufficient funds fee from your bank or credit union. It adds: read your loan documents carefully before signing them.
The Texas Office of Consumer Credit Commissioner says it oversees businesses that offer payday and auto title loans, among other regulated companies. It says consumers can contact it with questions by calling its Consumer Helpline at 800-538-1579 or by email, and it describes a complaint process for consumers who have experienced misrepresentation, fraud and deceptive practices on the part of the businesses it regulates. Its page also offers consumer education materials and a licensee search for regulated businesses.
The CFPB says active duty servicemembers and their dependents have protections under the federal Military Lending Act, including a cap of 36 percent on the Military Annual Percentage Rate, and suggests contacting a local Judge Advocate General (JAG) office.
If you are behind and a collector is calling, see what to do first when a debt collector contacts you, and what to do if you are sued over a debt in Texas. Free budgeting and money coaching is available through the Dallas Financial Empowerment Center.
The CFPB says there is no set definition, but it is usually a short-term, high-cost loan, generally for $500 or less, that is typically due on your next payday.
The CFPB says many state laws cap fees at $10 to $30 per $100 borrowed, and that a typical two-week loan with a $15 per $100 fee equates to an APR of almost 400 percent, compared with about 12 to 30 percent on credit cards.
The CFPB says you may choose to refuse to sign an ACH authorization and that you can revoke one. It also says federal law does not allow lenders to condition a payday loan on authorization for recurring electronic transfers.
The Texas Office of Consumer Credit Commissioner says it oversees payday and auto title lenders and lists a Consumer Helpline at 800-538-1579.
Sources last checked October 17, 2026. This article is general education, not financial, legal or medical advice. Rules, fees and programs change, so confirm details with the organization before you act.
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