Loan Rates and Fees in Tennessee

Tennessee caps payday loan (deferred presentment) fees at 15% of the face value of the check. Because the check amount includes the fee, lenders may charge up to $17.65 per $100 you receive. The maximum check amount is $500, meaning the most you can receive is $425.

For example, if you borrow $300, the maximum fee is $62.94, and your check would be for $362.94. Roughly, on a 14-day loan, a $17.65 fee per $100 works out to an APR of approximately 460%. Federal law requires lenders to disclose the APR before you sign.

• Rollovers: Rollovers are prohibited in Tennessee - a lender cannot roll an unpaid loan into a new loan.
• Returned payment fee: If your check is returned, the lender may charge a returned-check fee; Tennessee does not set a specific dollar cap on this fee, so check your agreement.
• Database verification: Tennessee does not require a statewide database check, but lenders must ask whether you have other outstanding payday loans.

Confirm current rules with the Tennessee Department of Financial Institutions (TDFI).

Tennessee does not have a single consumer installment-loan statute comparable to some states' small-loan acts. Installment loans made by licensed industrial banks or lenders under the Tennessee Industrial Loan and Thrift Companies Act may carry rates and fees governed by their specific charter provisions. Rates vary by lender, loan amount, and term.

Because rate structures differ by license type, there is no single statewide rate table for all installment lenders. Your lender must disclose the interest rate, APR, total of payments, and all fees before you sign.

• Prepayment: Ask your lender whether interest stops accruing upon early payoff or whether a rebate method applies.
• Returned payment fee: Same rule as payday - check your loan agreement for the specific amount.
• Late fees: Your agreement must state any late-fee amount and when it applies.
• Refinancing: If you refinance, you may pay additional fees and interest - review the new disclosure carefully.

Verify lender licensing and rate limits with TDFI.

• The lender is licensed by TDFI
• Total of payments - the full amount you will repay - is clearly stated
• If you are an active-duty servicemember or dependent, the Military Lending Act caps most loan APRs at 36%