Five hundred dollars is one of the most common amounts people borrow, and in Plano, Texas it is also where the lack of a statewide fee cap shows up most clearly. To understand the real cost to borrow $500 in Plano, you have to look past the first fee. You also need to see what happens if the loan is renewed, and compare it with cheaper options. This guide walks through the numbers in plain dollars.
Quick answer: A typical market price for a $500 two-week payday loan in Plano, Texas is about $110 to $125 in fees, so you repay roughly $610 to $625. That is a typical figure, not a legal cap, because Texas sets no statewide limit on these fees. Each renewal usually adds another fee, while a federal credit union payday alternative loan can cost about $43 or less in total.
What a $500 payday loan typically costs
Payday and auto title loans in Texas are usually arranged by a credit access business (CAB), which is licensed by the Texas Office of Consumer Credit Commissioner (OCCC). Texas does not cap CAB fees, and it sets no statewide limit on the loan amount. So there is no legal price for $500, only a market price.
A typical market figure, not a legal cap, is about $110 to $125 in fees for a $500 two-week loan. You would repay about $610 to $625 on the due date. Some businesses charge less and some charge more. The number that counts is the one on the disclosure you receive before you apply.
What renewals do to the cost
If you cannot repay on the first due date and the loan is renewed, a new fee is usually charged while the $500 stays owed. Using the typical range above:
- Repaid on time: about $110 to $125 in fees.
- Renewed once: roughly $220 to $250 in fees, and you still owe the $500.
- Renewed twice: roughly $330 to $375 in fees, and you still owe the $500.
Take a $115 fee. After two renewals you have paid $230 in fees, nearly half of what you borrowed, and the full $500 is still due. Closing the loan on the third due date costs another $615, so the total is $845 for the use of $500. Texas has no statewide limit on renewals, so the limit has to be one you set yourself.
Turning the fee into an APR
A $115 fee on $500 for 14 days is a 23% charge for two weeks. There are about 26 two-week periods in a year, so the annual percentage rate works out to roughly 600%. Typical market pricing falls around 570% to 650%. The number looks huge because the loan is so short, but it is the fairest way to compare with a loan repaid over months. See APR vs interest rate for Plano borrowers.
What $500 costs elsewhere
The credit union figures below are illustrations, so your actual terms will differ.
- A federal credit union payday alternative loan (PAL): interest is capped at 28%, plus an application fee of no more than $20. Worked example: $500 over three months at that maximum means three payments of about $174.50. That is $523.50 in total, or about $23.50 in interest. Add the full $20 fee and the whole cost is about $43.50.
- A regular credit union small loan (illustration only): $500 at an illustrative 18% over six months means six payments of about $87.76. That is $526.56 in total, or about $26.56 in interest.
- A Chapter 342 installment loan: licensed by the OCCC, with charges set by statute and rule according to loan size. Ask for the total of payments in writing and compare it with every other offer.
- An employer pay advance or a payment plan with the biller: often free, and worth one phone call.
Credit unions have their own membership rules, so compare a few. Our guide to Plano credit unions vs payday lenders explains where to start.
The renewal test
Before taking a $500 payday loan, ask whether you can repay $610 to $625 from one paycheck without coming up short again. If not, a renewal is likely, and an installment or credit union loan will probably cost less. See payday vs installment loans in Plano.
Why Plano borrowers need $500
Car repairs, summer electricity bills, hail damage and rent shortfalls top the list. Each has cheaper routes. For a repair, read about car repair loans in Plano. For power bills, call your retail electric provider about a payment arrangement, and see Plano electricity bill help. Water and trash are billed separately by the City of Plano, so ask the city about payment options.
Reading the disclosure for $500
Before you apply, a CAB must give you a consumer disclosure that compares the cost with other credit and shows repayment patterns. It must also post a fee schedule. Read three things: the fee in dollars if you repay on time, the total if the loan is renewed, and the comparison with other credit. There is no way to undo a loan once signed, so read before you sign.
Paying down, and not splitting the loan
If you must renew, ask whether you can pay part of the principal each time, since a smaller balance can mean a smaller next fee. Get the answer in writing.
Splitting $500 into two $250 loans rarely lowers the cost, because fees generally follow the amount borrowed. It also doubles the due dates. Instead, check whether the real gap is smaller. If a repair costs $500 and you have $200, borrow $300. At typical pricing, every $100 you do not borrow saves roughly $22 to $25 in fees on a two-week loan.
Fees on top of the fee
Read the agreement and the posted fee schedule for late and returned-payment charges. A returned payment can bring a charge from the lender and a separate fee from your bank, so a $115 loan cost can grow in one bad week. A CAB may not threaten or pursue criminal charges over a check or debit authorization you gave as security, unless there is forgery, fraud or theft. A bounced postdated check is not evidence of a crime.
Which rules apply in Plano
Some Texas cities have local rules for credit access businesses. We have not confirmed one for Plano, so ask the City of Plano and the lender which rules govern your loan. You can check a license or file a complaint at occc.texas.gov. Active-duty service members and covered dependents are protected by the Military Lending Act 36% MAPR cap, which rules out typical CAB pricing on $500.
Where to get help before borrowing
The Assistance Center of Collin County, at 900 18th St in Plano (972-422-1850), offers short-term rent and utility help for Plano ISD and Wylie ISD households at or under 200% of the federal poverty level. It pays the landlord or utility directly, so call to check current eligibility. You can also dial 2-1-1 Texas or ask the Plano Housing Authority.
Building toward not needing it
The cheapest $500 loan is the one you do not need. Saving $20 a paycheck reaches $500 in 25 paychecks. An automatic transfer on payday helps it stick, and a credit union account opened now gives you a place to ask about a small loan later.
Checklist before you borrow $500
- Is the business licensed by the OCCC?
- What is the fee on $500, in dollars?
- What will I have paid, and still owe, if I renew twice?
- Have I checked a credit union, a payment plan and local help?
Frequently asked questions
A typical market figure is about $110 to $125 in fees for two weeks, so you repay roughly $610 to $625. Texas does not cap the fee, so check the disclosure.
A new fee is usually charged each time, and the $500 stays owed. Two renewals can bring total fees to roughly $330 to $375.
About 570% to 650% at typical market pricing, or roughly 600% for a $115 fee over 14 days.
Usually far cheaper. A federal credit union PAL caps interest at 28% plus an application fee of at most $20. At the maximum, $500 over three months costs about $43 in interest and fees.
Ask the lender before you sign. Practices differ, so get the answer in writing.
No. Texas has no statewide cap on CAB fees or on the loan amount. Ask the City of Plano and the lender about local rules.
On the consumer disclosure the CAB must give you before the application, and on the fee schedule it must post.
Usually not. Fees generally follow the amount borrowed, and two due dates make a missed payment more likely.
This article is educational and is not financial or legal advice. Before you borrow, confirm the lender is licensed with the Texas Office of Consumer Credit Commissioner (OCCC), and read the fee disclosure in full.