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2025 Texas Statutes
Finance Code
Title 4 - Regulation of Interest, Loans, and Financed Transactions
Subtitle B - Loans and Financed Transactions
Chapter 342 - Consumer Loans
Subchapter E. Interest Charges on Non-Real Property Loans
Section 342.206. Additional Interest for Default: Irregular Transaction

Universal Citation:
TX Fin Code § 342.206 (2025)
Learn more This media-neutral citation is based on the American Association of Law Libraries Universal Citation Guide and is not necessarily the official citation.
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Sec. 342.206. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR TRANSACTION. (a) A loan contract that includes precomputed interest and that is an irregular transaction may provide for additional interest for default using the true daily earnings method for the period from the maturity date of an installment until the date the installment is paid. The rate of the additional interest may not exceed the maximum contract interest rate.

(b) A loan contract that includes simple interest and that is an irregular transaction may provide for additional interest for default if any part of an installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays. The additional interest may not exceed five cents for each $1 of a scheduled installment. Interest under this subsection may not be collected more than once on the same installment.

Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 934, Sec. 2.02, eff. Sept. 1, 1999.

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