The Legal Rate of Interest in Texas

State usury laws protect you from unfair interest rates.

Texas has state usury laws, which limit the maximum allowable interest rate that lenders can charge on certain types of loans. In Texas, the Office of Consumer Credit Commissioner oversees and assists with the enforcement of these laws.

Researching the Law

Chapter 306 of the Texas Finance Code establishes ceiling limits for commercial loans and Chapter 342 deals with consumer loans.

Commercial Loans

Commercial loans can not bear more than 18 percent interest per year annually, although the interest rate can float with inflation up to 24 percent. Commercial loans exceeding $250,000 can charge up to 28 percent interest. Depending on the type of business, these rates can be much higher. For example, car loans can charge up to 27 percent interest and pawn shops can charge up to 240 percent.

Consumer Loans

Depending on the amount and type of consumer loan, Texas allows a maximum interest rate of up to 30 percent, however, you should check with applicable state laws depending on the type of loan.

Enforcement

If you are involved with or know someone is involved with a loan in excess of these usury fees, contact the Texas Attorney General for further assistance.

References

• Texas Attorney General
• Texas Finance Code: Chapter 306
• Texas Finance Code: Chapter 342