With nearly 500 banks, 420 credit unions and countless online lenders, Texans have access to personal loans for all credit types. But with so many lenders to choose from, it can be hard to know where to start. This guide breaks down your options to help you find the best loan for your needs and budget.
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Where to get personal loans in Texas
Personal loans in Texas are available from national and local banks, credit unions and online lenders with nationwide reach. Here’s a closer look at each option.
Traditional banks
Getting a personal loan from a traditional bank could help you lock in a competitive interest rate if you have good to excellent credit. Right now, the lowest rates on personal loans from banks like Discover, PNC Bank and American Express start at 6.9% and reach up to around 24.99%.
If you’re an existing customer, you might also qualify for discounts on interest rates or fees, making it worth checking with your current bank first. However, you’ll typically need a minimum credit score of 670 or higher to qualify for a bank loan in Texas.
Keep in mind that the application process at traditional banks often takes longer than with online lenders. If speed is a priority, an online lender might be a better option.
Online lenders
An online lender is a good place to look for a personal loan if your credit score falls between 300 and 669. Online lenders tend to have more flexible eligibility criteria than traditional banks and are usually a better option for personal loans for bad credit in Texas.
But online lenders aren’t just for those with less-than-perfect credit. For example, LightStream offers a Rate Beat Guarantee, which promises to beat a competitor’s rate by 0.10 percentage points for applicants with good to excellent credit.
Interest rates from the top online lenders currently range between 6.99% and 35.99%, with the best rates going to borrowers with credit scores of 740 and up. Online lenders tend to have fast, streamlined applications, and if approved, you could have funds in your account in as little as 24 hours.
Credit unions
Like online loans, personal loans from credit unions in Texas come with competitive rates and more flexible criteria, making it easier to qualify if you have a fair credit score. Membership is required to apply, which may involve living in a certain area or simply making a small deposit.
Rates on personal loans from credit unions in Texas are capped at 18% until March 10, 2026, with current rates ranging from 8.74% to 18%, depending on your credit score and the credit union’s criteria.
Peer-to-peer lending
Unlike banks and credit unions, peer-to-peer (P2P) lenders offer loans funded by investors or everyday people. Because they cater to bad and fair credit borrowers, P2P rates tend to be higher than banks and credit unions — typically around 8.99% to 36% APR. Plus, with P2P loans, funding times can take longer than an online lender.
Texas credit unions to consider for personal loans
Compare some of the top credit unions in Texas to find lenders you may qualify for.
Credit Union Name | APR range | Term length | Membership |
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Community Resource Credit Union | 10.74% | Not stated |
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Credit Union of Texas | Not stated | Up to 60 months |
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Texans Credit Union | 8.74%+ | Up to 60 months |
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Texas DPS Credit Union | 9.99%+ | Up to 60 months |
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Texas Trust Credit Union | 8.99%+ | Up to 60 months |
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United Heritage Credit Union | Not stated | Up to 60 months |
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Personal loan eligibility requirements in Texas
While every lender is different, here are the general requirements to qualify for a personal loan in Texas:
- 18 years of age
- US resident or green card holder
- Minimum credit score of 620
- Minimum annual income of $24,000 from a job or pension
- Debt-to-income ratio of 43% or less
- No bankruptcies in the past two years
Remember, not all lenders follow these exact guidelines. Some may approve borrowers without a minimum credit score or with lower incomes. If you’re not a US resident, some lenders work with nonresidents.
Personal loan rates and fees in Texas
Texas lenders may include an origination fee on personal loans, especially if they cater to borrowers with lower credit scores. These fees can run anywhere from 1% to 10% of the total loan amount and are added to your loan or deducted from any funds you receive.
And while not all lenders charge these, you may also be on the hook for the following fees on your personal loan:
- Late payment fee. Typically around $15 or 5% of the payment due.
- Nonsufficient funds (NSF) fees. These can run from $20 to $40.
- Payment processing fee. Varies by payment amount and may be charged on accounts that don’t have autopay.
- Prepayment penalties. While most lenders don’t charge these, it could be equal to the interest you would have paid if you didn’t pay your loan off early.
Be sure to read your loan documents carefully to make sure you understand all the rates and fees that apply to your loan.
Tips for getting a personal loan in Texas
Finding the best personal loan in Texas involves seeking low rates and minimal fees. While not everyone qualifies for the lowest rates — especially with a credit score below 740 — there are still options available for borrowers with bad credit.
To make sure you’re getting the best deal for your credit score, follow these tips:
- Prequalify with multiple lenders. Prequalifying allows you to compare rates and terms without affecting your credit score, helping you find the best deal.
- Ask about rate discounts. Check if the lender offers rate discounts for setting up autopay, paying your creditors directly or having a cosigner. You could shave 0.25% to 0.50% or more off your rate.
- Look for low rate guarantees. Some lenders, like LightStream, have rate beat programs to help ensure you’re getting the lowest rate.
- Use collateral. Some lenders offer secured personal loans, which could help you lock in a lower rate.
- Consider credit unions. Because credit unions are member-owned, you can often find competitive rates on personal loans in your area.
- Manage your credit. Check your credit file and clean up any errors before applying for a loan. Also, don’t close out any existing credit accounts or apply for new credit before applying for a personal loan.
These steps can help you find a personal loan that fits your needs while keeping costs and terms manageable.
Texas personal loan laws and regulations
Texas usury laws set limits on how much interest lenders can charge to protect borrowers from excessively high rates. However, exceptions in the Texas Finance Code allow lenders to charge higher rates under certain conditions, particularly for riskier loan types. Here’s what you need to know:
- General usury limit. The Texas Constitution caps the annual interest rate at 10%. However, this limit often doesn’t apply to consumer loans because state law provides various exceptions.
- Optional rate ceilings. Lenders can opt into higher rate ceilings under Chapter 303 of the Texas Finance Code, allowing rates of up to 18% annually for specific loans.
- Consumer loans. Chapter 342 of the Texas Finance Code addresses consumer loans, allowing lenders to charge higher interest rates for certain types of loans, especially those involving higher risk.
In general, you should not pay more than 36% APR on a personal loan in Texas, even if you have bad credit. Many online lenders cater to bad credit borrowers in Texas and cap their rates at 35.99% APR. If you’re paying more than 36% APR on a loan, you’re likely working with an installment lender, which comes with shorter repayment terms and higher costs.
Alternatives to personal loans in Texas
If a personal loan in Texas isn’t the right fit, there are other ways to borrow money that might work better for your situation. Here are some alternatives to explore:
- Credit cards. For smaller expenses, a credit card can be a convenient option, especially if you qualify for a 0% introductory APR offer. Paying off the balance before the promotional period ends will allow you to avoid interest altogether.
- Home equity loan. A home equity loan allows you to borrow a lump sum against the equity in your home. These loans often come with lower fixed rates but require you to use your home as collateral.
- Home equity line of credit (HELOC). A HELOC provides access to funds when you need them, similar to a credit card, but it’s secured by your home.
- Personal line of credit. A personal line of credit works like a credit card but often comes with lower interest rates. It’s unsecured, so you won’t need collateral, but approval typically depends on having a strong credit history.
- Cash advance apps. Cash advance apps like EarnIn or Dave let you borrow small amounts of money from your paycheck with no interest, but beware of monthly membership fees and voluntary tips, which can add up.
- Retirement loan. Taking out a 401(k) loan (or borrowing from a similar retirement account) offers low-interest financing, but it reduces your retirement savings and may incur penalties if you don’t pay it off quickly.
- Borrow from family or friends. Borrowing from family or friends can help you save money on interest, but it’s a good idea to write out clear repayment terms to avoid any misunderstandings.
Frequently asked questions
Can I get a personal loan with bad credit in Texas?
Getting a personal loan with bad credit in Texas may take a little extra effort, but it’s doable. Many online lenders and credit unions will work with borrowers who don’t have perfect credit. Try prequalifying with a few lenders to see your options, or consider applying with a cosigner to boost your chances of approval.
What is the interest rate in Texas for a personal loan?
Interest rates for personal loans in Texas can vary widely depending on the lender and your credit score. Most rates fall between 6.99% and 36% APR, with the lowest rates reserved for borrowers with excellent credit. It’s a good idea to shop around and compare offers from multiple lenders to find the best rate.
What is the best personal loan company in Texas?
The best personal loan company in Texas depends on what you’re looking for — whether it’s low rates, fast funding or flexible credit requirements. LightStream is a great option for those with good to excellent credit, while Upstart works with borrowers who have lower credit scores. Credit unions in Texas can also be a solid choice, offering competitive rates and personalized service.
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