Personal loans in Texas

Where to get personal loans in Texas

Personal loans in Texas are available from national and local banks, credit unions and online lenders with national reach. Here’s a closer look at each option and how to qualify.

Traditional banks

Looking for a personal loan from a traditional bank could snag you a competitive 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 6.99% and reach up to around 24.99%.

You could also get an interest rate or fee discount if you’re an existing bank customer. But you’ll typically need a minimum credit score of 670 or higher to qualify for a bank loan in Texas, and funding times at a bank are generally slower than with online lenders.

Online lenders

An online lender is a good place to look for a personal loan if you have a credit score between 300 to 669. Online lenders tend to have more lenient eligibility criteria than banks and offer personal loans for bad credit in Texas. But online lenders aren’t just for bad credit. LightStream offers a rate beat guarantee, which could snag you the lowest interest rate possible if you have good to excellent credit.

Rates from the top online lenders are hovering around 6.70% and 35.99% currently, but the best rates go to people 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 may be easier to qualify with if you have a fair credit score. However, you must be a member to apply, which may require you to work or live in a certain area, although some only require a small deposit.

Rates on personal loans from credit unions in Texas are capped at 18% until September 2024. Right now, you could snag a rate between 6.99% and 18.00% on a personal loan at a credit union like Texas Trust Credit Union, depending on your credit score and other 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 8.00% to 36% APR. With P2P loans, funding times can take longer than with an online lender.

Texas credit unions to consider for personal loans

Compare the top credit unions in Texas to see lenders you might qualify with.

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, these are general guidelines only. Some lenders don’t have a minimum credit score requirement, and some may work with lower-income borrowers. If you’re not a US resident, there are lenders that work with nonresidents.

Personal loan rates and fees in Texas

Lenders in Texas that work with lower credit scores typically charge an origination fee on personal loans. 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 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 over your loan documents carefully to make sure you understand the rates and fees that apply to your loan.

Tips for getting a personal loan in Texas

The best personal loans in Texas have low rates and no or low origination fees. However, not everyone qualifies for the lowest rates, especially if your credit score is below 740, though you have bad credit personal loan options.

To make sure you’re getting the best deal for your credit score, follow these tips:

• Get prequalified. Prequalify with a few lenders to see what types of rates you can qualify for to make sure you’re getting 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 collateralized personal loans, which could help you secure 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 and don’t apply for new credit before applying for a personal loan.

When it comes to taking on debt like a personal loan, it’s best not to borrow more than you need, as you’ll pay more in interest over the long haul. If you don’t know how much you need, consider a credit line. Credit lines let you pay off your balance as you go to help avoid interest charges.

Texas personal loan laws and regulations

According to information on the Grhistlaw.com website, the usury rate in Texas is 10% annually, except as otherwise provided by law. However, this rate means “virtually nothing” given that details in the Texas Finance Code create an exception to this usury rate rule that essentially invalidates it.

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 is not the same thing as a personal loan lender.

If you can’t qualify for a personal loan in Texas due to bad credit, see our guide to bad credit loans for alternative sources of funding with more reasonable interest rates than what installment or payday lenders in Texas charge. Cash advance apps also offer loans between $20 and $500 between paychecks with zero interest.

To make sure you get accurate and helpful information, this guide has been edited by Holly Jennings as part of our fact-checking process.

Written by

Kat Aoki

Writer

Kat Aoki was a personal finance writer at Finder, specializing in consumer and business lending. She’s written thousands of articles to help consumers make better decisions on their home loans, bank accounts, credit cards, cryptocurrency and more. Kat is well versed in working with leading brands in the real estate, mortgage and personal finance industries, and her expertise has been featured on Forbes Advisor, Lifewire and financial comparison sites like iSelect and realestate.com.au. She holds a BS in business administration from California State University, Sacramento and enjoys hiking and yoga in her spare time. See full bio

Kat's expertise

Kat has written 187 Finder guides across topics including:

• Mortgages
• Home equity loans
• Mortgage refinancing