Installment Loans in Tennessee: 36% Cap, Fees & Terms

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Tennessee's industrial loan and thrift companies can charge up to 36% a year on installment loans of $100 or more, a cap raised from 30% on July 1, 2025, plus a short list of fees the law limits.

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Rate cap	36% a year, for lenders registered with TDFI
Fees	5% service charge, closing fee up to $50, $5 a month
Example	$2,000 over 24 months: $118.09 a month at 36%, before fees
Small loans	Up to $2,000: a 12.5% charge plus a monthly fee, instead of interest
You need	ID, proof of income and a bank account

Monthly Payments Flex Loans

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Tennessee Installment Payments at the 36% Ceiling

Loan	Payments	Interest
$1,000	12 × $100.46	$206
$2,000	24 × $118.09	$834
$4,000	36 × $183.22	$2,596
$5,000	48 × $197.89	$4,499

Worked out from Tennessee law, not offers from lenders in our network; a lender can charge less.

Fees come on top: a service charge of 5% of the loan taken up front, a closing fee of up to 4% of the amount financed ($50 at most) and $5 a month. With all three:

Loan	Payments	APR
$1,000, 12 mo	12 × $105.46	~66%
$2,000, 24 mo	24 × $123.09	~50%

On $1,000, the fees leave you $910 in hand, and you repay $1,265.52 in all. Repay within 90 days and the lender must refund part of the closing fee, though it can keep up to $25.

Paying by card or online? The lender can pass on only its actual processing cost, must tell you first, and must let you pay by check, cash or money order for free. A returned payment brings one bad-check charge, no more.

The 12.5% Option for Loans of $2,000 or Less

For loans up to $2,000, a lender can skip interest and the standard fees and charge an acquisition charge plus a monthly handling charge instead, for up to 25 months.

Loan size	Acquisition	Handling a month
$1,000	12.5%	$20
$1,001–$1,250	12.5%	$23
$1,251–$1,500	12.5%	$26
$1,501–$1,750	12.5%	$29
$1,751–$2,000	12.5%	$32

At the caps, $1,000 over 12 months carries $405.00 in charges, closing fee included: 12 payments of $117.08, about 68% APR. The 36% route on the same loan comes to about 66% with all three fees, so ask which one your offer uses.

Flex Loans: A $4,000 Credit Line, Not an Installment Loan

Some Tennessee lenders offer flex loans instead: open-end credit lines of up to $4,000. The lender can charge 24% a year plus a customary fee of up to 0.7% of your average balance each day, about 279.5% a year combined.

$1,000 balance

$229.73

for a 30-day cycle

First minimum

$259.73

charges plus 3% of the principal

$4,000 balance

$918.90

for a 30-day cycle

One flex plan at a time, and you can cancel any draw by the next business day.
Prepay any part at any time without a penalty. After a default, the daily fee stops.

Three Moves Before You Sign a Tennessee Installment Loan

Choose an amount and a term you can carry; the tables above show payments at the caps.
Submit one request through LendUp. Lenders in our network review it, and any offer shows the APR, payments and total cost before you sign.
Check whether the offer is an installment loan or a flex line, and compare APRs.

Check Your Options

Finding the Lender's Industrial Loan Registration

Official lookup tool NMLS Consumer Access

Search NMLS Consumer Access by the company's legal name or NMLS ID.
Look for a Tennessee industrial loan and thrift registration, or a flexible credit license for a credit line.
Every office needs its own registration, so match the location to your papers.

Questions: TDFI at (615) 741-2236. Complaints: 1-800-778-4215 or TDFI's online form.

Common Questions

What is the maximum interest rate on an installment loan in Tennessee?

36% a year for industrial loan and thrift companies on loans of $100 or more, since July 1, 2025. Before that, the cap was 30%.

What fees can a Tennessee installment lender charge?

A 5% service charge, a closing fee of up to 4% (no more than $50) and $5 a month. Loans up to $2,000 can use a 12.5% acquisition charge and a monthly handling charge instead of interest.

Is a flex loan an installment loan?

No. A Tennessee flex loan is an open-end credit line of up to $4,000, and each payment must cut the principal by at least 3% a month.

Can I get an installment loan with bad credit in Tennessee?

You can apply; each lender decides, and approval isn't guaranteed. A lender registered with TDFI still can't pass the 36% cap and fee limits.

Can I pay off a Tennessee installment loan early?

Yes. Repay within 90 days and the lender must refund part of the closing fee, keeping up to $25. Flex loans can be prepaid at any time without a penalty.

How do I know an installment lender is licensed in Tennessee?

Find it in NMLS Consumer Access with an active Tennessee industrial loan and thrift registration, or a flexible credit license for a credit line. Call TDFI at (615) 741-2236 if it's missing.

Official Sources

General information, not legal advice. Facts on this page were checked against these sources on October 28, 2026.

← Tennessee loan rules