Payday Loans

Tennessee Payday Loan Laws

As per Tennessee payday loan laws, payday lending in this state is not only legal but is also very expensive, as lenders are allowed to charge a 3-digit APR (annual percentage rate). If you borrow $500 as a short-term cash advance for a repayment period of fourteen days, you may have to pay up to interest at the rate of up to almost 500% per annum. However, the good news is that the state laws have imposed various restrictions on payday lenders, which eventually makes things a little easier for the borrowers. If you are considering borrowing these loans to meet your urgent financial needs, you are strongly recommended to try cheaper and more convenient alternatives, such as borrowing an advance from your employer, taking a short-term conventional loan from a credit union, and other such things. If you anyways have to borrow payday loans or if you are already trapped in payday debt, make sure that you are thoroughly aware of the laws applicable in your state. The more informed you are, the better you will be able to protect yourself.

Collection Charges And Lawsuits

As per Tennessee payday loan laws, inability to pay off a payday loan is not a criminal offence. It means criminal lawsuits cannot be filed against you if you are unable to make the repayment. The state laws have even imposed a limit on collection charges. Payday loan lenders in Tennessee cannot charge more than $30 as NSF fee (when your post-dated check is returned because of insufficient fund in your checking bank account). Besides that, the laws also prohibit lenders from sending the same check again and again for collections. It is illegal to charge more than one NSF fee on a single loan account. However, lenders are allowed to charge certain amount of court costs, especially if a provision regarding the same has been disclosed in the loan agreement.

No Rollovers Are Allowed

Tennessee payday loan laws do not permit rollovers or renewals or debt consolidation of short-term cash advances in cases where a borrower fails to repay the loan within the set due date. However, lenders are allowed to offer an affordable repayment plan in easy monthly installments if the borrower agrees to any such agreement. But, the state laws prohibit them from charging interest or any additional finance charges for the extended period allowed to the borrower as part of the repayment plan.

Interest Rate And Finance Charges

Payday loan companies in Tennessee can charge either $30 or 15% of the check issued, whichever is lesser. Besides that, Tennessee payday loan laws also allow additional finance charges of up to $17.65 on every $100 of loan issued for a 14-day period.

Maximum Limit On Repayment Period And Loan Amount

The repayment period on short-term cash advances issued to the borrowers residing in the state of Tennessee cannot be longer than thirty-one days. The maximum loan amount (per account) that can be issued must not exceed $500.

Maximum Number Of Loans

Every licensed payday loan company in this state can issue a maximum of two cash advances to a single borrower. Besides that, the Tennessee payday loan laws also specify that any individual borrower cannot have more than three (aggregate total) outstanding payday loans in his/her name at one time.

If your lender is treating you unfairly and illegally, you can contact the Tennessee Department of Financial Institutions for help. The Tennessee Department of Financial Institutions is the regulatory authority in this state, which can be contact at (615) 532-1018 (fax number) and at (615) 741-2236 (phone number). Their office is located at 511 Union Street, Suite 400 Nashville TN 37219.

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Posted in Payday Loan Laws, Payday Loans | 1 Comment »

One Response to “Tennessee Payday Loan Laws”

  1. Macc says:


    Pay day loan is very costly in the state of Tennessee. Through here are some laws to restrict the lenders yet it is not sufficient to make the pay day lending programme transparent and cheaper. Any individual who is having though of taking a pay day loan should certainly think twice before going for it . There are so many other options available in the market which can prove to be better than pay day loan. If no other choice suits you than it will be good to study care fully about the pay day loan laws of the state. The best part is that no criminal case can be filed against you if you are not able to repay the loan amount. The charges like penalty charges or any other charges are also restricted to a certain limit. The most important thing is that rollovers are not permitted in the state of Tennessee. Interest rate and other charges are also regulated by the state authorities, some additional finance charges can be taken on carry loan of a certain amount. The time period and maximum loan amount is also very well defined in the pay day loan laws of state.

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