(a) Precomputed loans. Additional interest for default may be charged on a Texas Finance Code, Chapter 342, Subchapter F precomputed loan to the extent it is authorized by Texas Finance Code, §342.257.
(b) Subchapter F loans less than $100. If the cash advance of the loan is less than $100, an authorized lender may assess, charge, and collect a default charge equal to 5% of the scheduled installment amount if any part of the installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.
(c) Subchapter F loans equal to or greater than $100. If the cash advance of the loan is equal to or greater than $100, an authorized lender may contract for a default charge:
  (1) that does not exceed 5% of the scheduled installment amount if any part of the installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays; or
  (2) that does not exceed 5% of the scheduled installment amount or $10, whichever is greater, if any part of the installment remains unpaid after the 10th day after the date on which the installment is due, including Sundays and holidays.
(d) Contract required. No default charge may be assessed, imposed, charged, or collected unless contracted for in writing by the parties.
(e) Default period. A default charge may not be assessed until after the 10th day after the installment due date. For example, if the installment due date is the 1st of the month, a default charge may not be assessed until the 12th of the month.
(f) Pyramiding prohibited. An authorized lender seeking to assess additional interest for default on a precomputed loan under Texas Finance Code, §342.257 must comply with the prohibition on the pyramiding of late charges provided by the Federal Trade Commission's Credit Practices Rule at 16 C.F.R. §444.4.
(g) Default charge on final installment of multiple payment loan. A default charge is allowed on the final installment of a multiple installment loan.
(h) Default charge on single payment loan. A default charge under Texas Finance Code, §342.257 is not allowed on a single payment loan. After maturity interest may be contracted for, charged, and collected on a single payment loan.

Source Note: The provisions of this §83.602 adopted to be effective November 9, 2006, 31 TexReg 8992; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142; amended to be effective May 12, 2022, 47 TexReg 2738