(a) Precomputed loans. An authorized lender may charge
the add-on rates authorized by Texas Finance Code, §342.201(a)
or the alternative simple interest rate authorized by Texas Finance
Code, §342.201(d) or (e) as calculated by the scheduled installment
earnings method, for precomputed loans that are either unsecured or
secured by personal property. Prepaid interest in the form of points
is not permitted, unless expressly authorized by statute.
(b) Interest-bearing loans. An authorized lender may
charge any rate of interest that does not exceed the maximum rate
authorized by Texas Finance Code, §342.201(d) or (e) as calculated
by the true daily earnings method or the scheduled installment earnings
method, for an interest-bearing loan that is either unsecured or secured
by personal property. Prepaid interest in the form of points is not
permitted, unless expressly authorized by statute.
(c) Method of calculation.
(1) An authorized lender making loans under Texas Finance
Code, §342.201(a), (d), or (e) may calculate the rate and amount
of interest by any method of calculation as long as the amount of
interest charged does not exceed the maximum rate or amount of interest
set forth in Texas Finance Code, §342.201(a), (d), or (e) calculated
using the specified earnings methods of Texas Finance Code, §342.201.
(2) An authorized lender making a loan under Texas
Finance Code, §342.201(e) and (e-1)(1) may contract for, charge,
and receive an amount of interest, calculated according to the scheduled
installment earnings method or true daily earnings method, not exceeding
the equivalent total of a:
(A) simple annual rate of 30% on that portion of the
unpaid balance of the cash advance that is less than or equal to the
amount computed under Texas Finance Code, Chapter 341, Subchapter
C, using the reference base amount of $500;
(B) simple annual rate of 24% on that portion of the
unpaid balance of the cash advance that is more than the amount computed
for subparagraph (A) of this paragraph but less than or equal to an
amount computed under Texas Finance Code, Chapter 341, Subchapter
C, using the reference base amount of $1,050; and
(C) simple annual rate of 18% on that portion of the
unpaid balance of the cash advance that is more than the amount computed
for subparagraph (B) of this paragraph but less than or equal to an
amount computed under Texas Finance Code, Chapter 341, Subchapter
C, using the reference base amount of $2,500.
(3) An authorized lender making a loan under Texas
Finance Code, §342.201(e) and (e-1)(2) may contract for, charge,
and receive an amount of interest, calculated according to the scheduled
installment earnings method or true daily earnings method, by applying
a single equivalent daily rate to the unpaid principal balance for
the actual or scheduled number of days during a payment period, where
the single equivalent daily rate is determined at the inception of
the loan using the scheduled installment earnings method and would
earn an amount of interest authorized under Texas Finance Code, §342.201(e)
if the debt were paid to maturity according to the schedule of payments.
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Source Note: The provisions of this §83.501 adopted to be effective November 9, 2006, 31 TexReg 8989; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142; amended to be effective November 7, 2019, 44 TexReg 6528 |