Payday Loans are Legal in Tennessee

Beware of predatory lending

Payday Lenders in Tennessee

Payday loans have become a popular way for Tennessee residents to gain quick access to cash when unexpected expenses arise. These short-term loans, often taken out to bridge financial gaps until the next payday, are subject to certain criteria set forth by state regulations. It is true that they can provide immediate relief for those in need, payday loans can quickly spiral out of control.

They may be a convenient option for individuals who need quick access to funds, but the short repayment periods and high-interest rates associated with them can make them a risky choice. Borrowers in Tennessee should be cautious when considering payday loans to avoid falling into a cycle of debt. It is critical to carefully consider all of the consequences before taking out a payday loan and to explore alternative options which may be more manageable in the long run.

Payday Loan Laws

Tennessee laws surrounding payday loans are designed to protect consumers from predatory lending practices and ensure that lenders follow the state’s guidance. The legal statutes require that lenders both local and out of state are licensed, and meet specific financial gateways to operate in the state.

The State of Tennessee has several pieces of legislation surrounding payday loans:

Tenn. Code Ann. §45-17-101: Sets and regulates the loan terms including maximum loan amount, maximum loan terms and allowable finance charges.
Tenn. Code Ann. §45-17-112: Restricts borrowers to two outstanding loans from any one lender not amounting to more than $500, and a total of 3 outstanding loans total. Lenders are only required to ask the borrower if they have more loans, there is no online verification. This statue also prohibits rollovers.

Loan Terms and Conditions

Maximum loan amount: $500

Maximum Interest Rate: 460%

Minimum loan term: No minimum term defined by regulation

Maximum loan term: 31 days

Number of rollovers allowed: none

Finance Charge: $17.65 (based on $100 dollars for 14 days)

Legal action: 6 Years

Certified Payday Lenders in Tennessee

Company Name	Company score	License Status
CURO Intermediate Holdings	8	Valid
ENOVA INTERNATIONAL, INC.	7.6	Valid
COMMUNITY CHOICE FINANCIAL, INC.	7.1	Valid
Populus Financial Group, Inc.	6.8	Valid
Big Picture Loans, LLC	6.5	Valid
Delbert Services	6.4	Valid

History of Tennessee Payday Loans

In the 1990s, the payday loan industry was born in Tennessee when Allan Jones founded Check Into Cash, the first alleged payday loan company. This propelled the growth of the payday loan industry in the state. In 2010, the Deferred Presentment Services Act became law, capping finance charges at 15% and limiting maximum loans to $500. This legislation still regulates payday loans in Tennessee today. The 2014 Metro Council bill that passed in Nashville is another attempt to regulate the industry by preventing payday lenders from opening within a quarter-mile of one another. Despite these efforts, payday lending remains a thriving industry in Tennessee, with little movement for significant legislative changes in the near future.

State Resources

How to file a complaint

The Tennessee Department of Financial Institutions provides information on payday loans and regulations and is where borrowers can go to file a complaint against a lender. Forms can be submitted electronically through their portal or paper complaints can be mailed to the office. Once the complaint is sent to the department it will be assigned to a Consumer Resources Examiner for review.

Tennessee Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

Tennessee payday loan debt is difficult to get rid of, but there are ways to do it. First, stop taking out more payday loans to pay off existing debts. This will only add to your problem. The next step is to create a monthly budget and assess your finances. Then, you should contact your lenders to discuss repayment plans and apply for any hardship programs that may be out there. Credit counseling services or legal aid can help you to negotiate a lower interest rate and provide strategies for debt reduction. You should stick to their repayment schedule and avoid defaulting on outstanding loans. This could result in additional fees or damage to your credit rating.

Support Resources

Types of Quick Loans in Tennessee

Flex Loans Flex loans in Tennessee are a type of credit that offers borrowers more flexibility than traditional loans. Flex loans allow borrowers to get money as needed up to a predetermined credit limit. Borrowers can choose to make monthly payments or make payments when they have available funds. Interest is only charged on the amount borrowed, not the total credit limit. However, it is important to note that flex loans typically come with higher interest rates than traditional loans and can be difficult to pay back due to their open-ended nature. Borrowers should carefully consider their financial situation and budget before taking out a flex loan.

Installment Loans Installment loans are a type of loan that allows Tennessee residents to borrow a specific amount of money and repay it in installments over time. These loans are typically used for larger expenses, such as home repairs or debt consolidation. Unlike payday loans, installment loans have longer repayment terms, making them a more manageable option for borrowers. While all that is true, they still come with higher interest rates than traditional loans, and failure to repay on time can result in additional fees and damage to the borrower's credit score.

Car Title Loans Title loans in Tennessee are a type of short-term loan that allows borrowers to obtain cash quickly by using their vehicle as collateral. The loan amount is based on the value of the borrower's vehicle but cannot exceed $2500, and the lender places a lien on the vehicle until the loan is paid back in full. Title loans in Tennessee typically have high-interest rates, reaching up to 264% and short repayment terms that cannot exceed 30 days. This can make it very challenging for borrowers to repay the loan on time. It is essential to understand the terms and conditions of the loan before agreeing to the loan to avoid any potential issues down the line.

Alternatives to Payday Loans in Tennessee

Personal Loans

Personal loans are a popular option in Tennessee for those in need of quick cash for personal expenses. Personal loan providers in Tennessee may have varying requirements, such as a minimum credit score or income level, but they typically offer flexible repayment terms and competitive interest rates. Borrowers can use personal loans to consolidate debt, cover unexpected expenses, or fund a large purchase, such as a home renovation or even a wedding. With so many options available, borrowers should compare rates and terms from multiple lenders to find the best personal loan for their specific needs.

Home Equity Loans

Construction loans are a popular choice for those in Tennessee looking to build a new home or undertake a major renovation project. These loans are most often short-term and are used to cover the cost of materials, labor, and other expenses associated with the construction. Tennessee providers may require detailed plans and specifications, as well as a substantial down payment, before approving a loan. Once construction is complete, borrowers can refinance their construction loan into a traditional mortgage, if desired.

Construction Loans

Bad Credit Loans in Tennessee

For those with bad credit in Tennessee, obtaining a loan can be challenging. However, there are options available like bad credit loans. These loans are designed specifically for individuals with low credit scores or limited credit history. In Tennessee bad credit loans may have higher interest rates than traditional loans and could require collateral to be put up, such as a car or property. Still, they can be a valuable resource for those who need financial assistance but cannot qualify for traditional loans. Borrowers should carefully consider the terms and conditions of bad credit loans and work with a reputable lender to ensure that they do not fall victim to predatory lending practices.

Tennessee Small Business Loans

Tennessee offers various types of small business loans with specific requirements and terms; each option offers benefits unique to itself:

SBA loans: The Small Business Administration (SBA) offers loans to small businesses through partnering lenders. These loans include the SBA 7(a) loan, SBA 504 loan, and microloans.
Tennessee Capital Access Program (TCAP): A loan program that provides small businesses with access to capital by working with lenders to provide loan guarantees.
Tennessee Rural Opportunity Fund (TROF): A program designed to help small businesses in rural areas by providing low-interest loans through the Tennessee Department of Economic and Community Development.
Accion: A non-profit lender that offers small business loans to underserved communities in Tennessee, with a focus on minority and women-owned businesses.
Merchant Cash Advances: Some lenders offer merchant cash advances to small businesses, which provide cash upfront in exchange for a percentage of future credit and debit card sales.

VA loans in Tennessee

VA loans in Tennessee are a valuable resource for military service members, veterans, and their families. These loans are backed by the U.S. Department of Veterans Affairs and offer competitive interest rates and flexible repayment terms. VA loans in Tennessee can be used to purchase a new home, refinance an existing mortgage, or make home improvements. Borrowers will need to meet eligibility requirements, such as having served a certain number of years in the military or being the spouse of a service member who died in the line of duty. VA loans offer a valuable opportunity for military families to achieve their homeownership goals.

Tennessee Student Loans

Tennessee students have various options available to them to finance their college education, including:

Federal Student Loans: Tennessee students have access to federal student loans as a vital financial tool that they can utilize towards covering college tuition and related costs.
Tennessee Student Assistance Corporation (TSAC) Loans: TSAC offers loans to Tennessee residents attending eligible institutions within the state, with options for undergraduate and graduate students as well as parents.
Tennessee Promise Scholarship: This is a scholarship program that provides last-dollar scholarships for eligible Tennessee high school graduates to attend two-year colleges or technical schools tuition-free.
TEACH Grant: This is a federal grant available to students who agree to teach in a high-need field at a low-income school for at least four years after graduation.
Private Student Loans: Offered by banks, credit unions, and other private lenders, and often have higher interest rates than federal or state funding. Students can use these to cover education expenses that federal loans don't cover.

Tennessee Income Information

The economy of Tennessee is diverse, with major industries including agriculture, manufacturing, healthcare, and tourism. The state’s central location and business-friendly environment have contributed to its economic growth and competitiveness.Tennessee had an overall median household income of $58,516 in 2021 which was lower than the national median of $69,021. Income varies drastically depending on which county a Tennessean lives in – Williamson County had an overall median household income of $111,196, 102.8% above the state average, while Hancock County had the lowest at $28,234. The poverty percentage in Tennessee for 2021 was 13.6%.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on May 1, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Tennessee. Accessed on May 1, 2023.

Tennessee Payday Lender Complaints

Below are trends associated with the top payday lenders in Tennessee, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
CURO Intermediate Holdings	39
ENOVA INTERNATIONAL, INC.	32
COMMUNITY CHOICE FINANCIAL, INC.	21
Populus Financial Group, Inc. (F/K/A Ace Cash Express)	17
Big Picture Loans, LLC	15
Delbert Services	12
Total Complaints	428

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on May 1, 2023.

Most Common Issues

Complaint type	Count
Charged unexpected interest or fees	150
Struggling to pay loan	55
Can’t contact lender	45
Can’t stop withdrawals from account	43
Bank account charged wrong day/amount	27

What are the main reasons residents of Tennessee apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Nashville-Davidson
Memphis
Knoxville
Chattanooga
Clarksville
Murfreesboro
Franklin
Johnson City
Jackson
Hendersonville

Bartlett
Kingsport
Smyrna
Collierville
Spring Hill
Cleveland
Brentwood
Gallatin
Columbia
Germantown

La Vergne
Mount Juliet
Lebanon
Cookeville
Maryville
Oak Ridge
Morristown
Bristol
Farragut
Shelbyville

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Payday loans are generally not reported to the three major credit reporting agencies, and lenders generally do not check your credit report as part of the application process.

What do I need to apply for a payday loan?

To apply for a payday loan in Tennessee, you will typically need a checking account, income, have no outstanding loans, proof of employment and meet the minimum age requirement.

Can I cancel my payday loan?

In Tennessee, you have the right to cancel a payday loan by the close of the following business day after the loan was made and this can be done by returning the full amount of the loan to the lender.

Can a payday loan lender garnish my wages?

Yes, a payday lender can garnish your wages in Tennessee if they obtain a court judgment against you, and the amount they can garnish is limited to 25% of your disposable earnings, as per Tennessee law.

Can spouses have separate loans?

Yes, spouses can have separate payday loans in Tennessee as long as they each meet the lender’s eligibility requirements and can demonstrate their ability to repay the loan.

When will I receive my funds if I am approved for a payday loan?

You will receive your funds on the same day or the next business day, depending on the lender’s policies and the timing of your application.

What happens if I can’t repay my payday loan on time?

If you are unable to repay your payday loan on time in Tennessee, you may be charged additional fees and interest, face legal action, and be unable to take out another loan until the previous one is paid in full.

When could I apply for another payday loan?

In Tennessee, there is no specified waiting period between payday loan applications, but borrowers are only allowed to have a maximum of two outstanding loans at any given time.