Tennessee Payday Loans - $500 Max, 15% Fee Cap, TDFI Rules (2026)
Tennessee regulates payday loans under the Deferred Presentment Services Act (TCA Title 45, Chapter 17), with consumer protections enforced by the Tennessee Department of Financial Institutions (TDFI). The law caps payday loans at $500 maximum with a 15% fee (no interest), allows 14-31 day terms, and prohibits multiple simultaneous loans through statewide database tracking. Tennessee also requires lenders to offer a free Extended Payment Plan (EPP) once per year. This guide explains Tennessee's payday loan regulations, costs for residents in Nashville, Memphis, Chattanooga, and consumer protection resources.
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Tennessee Payday Loan Laws - What You Need to Know
Tennessee enacted the Deferred Presentment Services Act (Tennessee Code Annotated, Title 45, Chapter 17) to regulate payday lending and protect consumers. The law was significantly strengthened in 2014 with the $500 maximum and annual borrowing limits. All payday lenders must be licensed by the Tennessee Department of Financial Institutions (TDFI) and participate in a statewide database (Veritec Solutions) that tracks loans in real-time.
Key Tennessee Payday Loan Regulations:
- $500 maximum loan amount - Strictly enforced through Veritec database
- 15% fee cap (no interest) - $75 max fee for $500 loan (total $575 repayment)
- 14-31 day loan terms - Flexible terms (unlike Michigan's fixed 31 days)
- One loan at a time - Database prevents multiple simultaneous loans
- $1,875 annual limit - Total payday loans in 365 days cannot exceed this amount
- No rollovers - Renewals prohibited (one refinance allowed with 10% principal repayment)
- Free Extended Payment Plan (EPP) - Once per year, 60-day extension with no fees
Tennessee's 15% fee structure is straightforward: a $500 loan costs exactly $75 for 31 days (191% APR) or $75 for 14 days (391% APR). Unlike Ohio (which limits borrowers to 4 loans per year), Tennessee uses an annual dollar limit ($1,875) instead of a loan count limit. This means you can theoretically borrow 3.75 times the $500 maximum spread across multiple loans if you repay each fully.
The Extended Payment Plan (EPP) is Tennessee's strongest consumer protection. If you cannot repay your loan on time, you can request a free 60-day extension once per year (must request at least 2 days before due date). This prevents forced rollovers and gives you breathing room. The EPP adds no fees or interest - you simply get 60 more days to repay the original loan amount plus the 15% fee.
Tennessee Payday Loan Cost Comparison
Here's how much payday loans cost in Tennessee for common loan amounts. Remember: Tennessee caps fees at 15% of loan amount, with terms between 14-31 days. APR varies based on loan term chosen.
| Loan Amount | Fee (15%) | Total Repayment | APR (14 days) | APR (31 days) |
|---|---|---|---|---|
| $100 | $15 | $115 | ~391% | ~191% |
| $200 | $30 | $230 | ~391% | ~191% |
| $300 | $45 | $345 | ~391% | ~191% |
| $400 | $60 | $460 | ~391% | ~191% |
| $500 (Max) | $75 | $575 | ~391% | ~191% |
💡 Lower Your Tennessee Payday Loan Cost
Choose 31-day terms: A $500 loan for 31 days = 191% APR. The same loan for 14 days = 391% APR. The longer term cuts your APR in half while keeping the $75 fee the same.
Use the EPP if needed: If you can't repay on time, request the free Extended Payment Plan at least 2 days before your due date. You get 60 more days to repay with zero additional fees.
Better alternative: Tennessee credit unions offer payday alternative loans (PALs) at ~28% APR max. Example: $500 PAL = $12/month vs. $75 payday fee.
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Payday Loan Examples by Tennessee City
Tennessee payday loan laws apply statewide - residents of Nashville, Memphis, Knoxville, Chattanooga, and all other cities face the same $500 limit and 15% fee cap. Here are representative examples for different city tiers:
🏙️ Nashville (Population: 715,884) - Tier 1 City
Loan Amount: $500 (maximum)
Fee (15%): $75
Total Repayment: $575
Loan Term: 31 days (recommended)
APR: ~191% (31 days) or ~391% (14 days)
Nashville Context: Median household income $66,970 (2024). Nashville's booming economy (healthcare, music industry) has 80+ licensed payday locations, but most residents use online lenders. As state capital, Nashville residents have strong consumer protection enforcement.
Affordability: A $575 repayment equals ~10.3% of monthly median income ($5,581). Manageable for most Nashville households.
🏘️ Memphis (Population: 633,104) - Tier 2 City
Loan Amount: $400
Fee (15%): $60
Total Repayment: $460
Loan Term: 31 days
APR: ~191%
Memphis Context: Median household income $44,070 (2024). Memphis has one of the highest payday lender densities in Tennessee (100+ locations) due to lower income levels and limited banking access. The Midsouth Community Federal Credit Union offers PALs as an alternative.
Affordability: A $460 repayment equals ~12.5% of monthly median income ($3,673). Higher burden than Nashville.
🏡 Knoxville (Population: 190,740) - Tier 3 City
Loan Amount: $300
Fee (15%): $45
Total Repayment: $345
Loan Term: 31 days
APR: ~191%
Knoxville Context: Median household income $52,920 (2024). Knoxville (home to University of Tennessee) has 40+ payday locations. The city's economy is balanced between education, healthcare, and manufacturing. Knoxville TVA Employees Credit Union offers lower-cost alternatives.
Affordability: A $345 repayment equals ~7.8% of monthly median income ($4,410). Most affordable major city ratio in Tennessee.
Frequently Asked Questions - Tennessee Payday Loans
What is the maximum payday loan amount in Tennessee?
Tennessee law caps payday loans at $500 per loan. This limit has been in place since 2014 under the Tennessee Deferred Presentment Services Act. While $500 is the same as Florida and lower than Ohio ($1,000), Tennessee enforces strict database tracking to prevent borrowers from exceeding the $500 cap across multiple lenders. The limit applies to all payday loans regulated by the Tennessee Department of Financial Institutions (TDFI).
How much does a payday loan cost in Tennessee?
Tennessee payday loans are capped at 15% of the loan amount in fees. For a $500 loan for 31 days, you would pay $75 in fees, making the total repayment $575. This translates to an APR of approximately 191% for a 31-day loan (or 391% for a 14-day loan). Tennessee law prohibits lenders from charging fees beyond the 15% cap - no interest or additional monthly charges. The TDFI enforces these caps strictly. For a $300 loan, the maximum fee is $45 (total repayment $345).
Does Tennessee regulate payday lenders?
Yes, Tennessee payday lenders are regulated by the Tennessee Department of Financial Institutions (TDFI). All payday lenders must be licensed under the Tennessee Deferred Presentment Services Act (TCA Title 45, Chapter 17). TDFI conducts examinations of licensed lenders, investigates consumer complaints, and can suspend or revoke licenses for violations. Tennessee participates in a statewide database (Veritec Solutions) that tracks all payday loans in real-time to enforce borrowing limits and prevent multiple simultaneous loans.
How many payday loans can I have in Tennessee?
Tennessee law limits borrowers to one payday loan at a time. You cannot have two simultaneous payday loans from different lenders - the statewide database prevents approval of a second loan until your first loan is fully repaid. Additionally, Tennessee limits the total amount of payday loans in a 365-day period to $1,875 (approximately 3.75 times the $500 maximum). This means you can take out multiple loans throughout the year, but the cumulative amount cannot exceed $1,875.
What is the minimum loan term in Tennessee?
Tennessee requires a minimum loan term of 14 days for payday loans. Maximum loan term is 31 days. Unlike Michigan (which mandates exactly 31 days), Tennessee allows flexible terms between 14-31 days. Most lenders offer either 14-day or 31-day loans. The 14-day minimum prevents extremely short-term debt traps, though it is shorter than Ohio's 31-day minimum. Longer terms result in lower APR: a $500 loan at 31 days = 191% APR vs. the same loan at 14 days = 391% APR.
Can payday loans be rolled over in Tennessee?
No, Tennessee law prohibits payday loan rollovers and renewals. Once you take out a payday loan, you must fully repay it on the due date. However, Tennessee allows one refinance per loan if you repay at least 10% of the principal. Additionally, Tennessee law requires lenders to offer a free Extended Payment Plan (EPP) once per year if you request it at least 2 days before the due date. The EPP gives you 60 additional days to repay with no extra fees or interest.
Do Tennessee payday lenders check credit?
Most Tennessee payday lenders do not perform traditional credit checks with Equifax, Experian, or TransUnion. However, all lenders must check the Tennessee Veritec Solutions database before approving a loan to verify you do not have an outstanding payday loan and have not exceeded the $1,875 annual borrowing limit. Some lenders may use alternative credit checks (Clarity Services, Teletrack) to verify your identity and banking information. Your payday loan activity is reported to the state database but typically not to major credit bureaus unless the loan goes to collections.
Are payday loans available in Nashville, Memphis, and Knoxville?
Yes, payday loans are available throughout Tennessee, including Nashville (population 715,884), Memphis (633,104), and Knoxville (190,740). Most lenders operate online, serving all Tennessee ZIP codes. Storefront locations are widespread - Nashville has 80+ licensed locations, Memphis has 100+ (one of the highest densities in the state), and Knoxville has 40+. Online lenders licensed by Tennessee TDFI can serve residents statewide. The Veritec database ensures all loans comply with state law regardless of where you live in Tennessee.
How do I verify a Tennessee payday lender is licensed?
Check the Tennessee TDFI website at tn.gov/tdfi for the official list of licensed payday lenders (Deferred Presentment Services Licensees). You can search by company name or license number. All legitimate Tennessee payday lenders must display their TDFI license number on their website and in physical locations. Unlicensed lenders cannot legally operate in Tennessee and are not bound by the $500 limit or 15% fee cap. If you suspect an unlicensed lender, contact TDFI Consumer Resources at 615-741-2236 or 800-778-4215.
What happens if I cannot repay my Tennessee payday loan?
If you cannot repay your Tennessee payday loan on the due date, immediately request the free Extended Payment Plan (EPP) at least 2 days before your loan is due. Tennessee law requires lenders to offer one EPP per year, giving you 60 additional days to repay with no extra fees or interest. If you miss the due date without requesting an EPP, the lender can deposit your postdated check or initiate ACH withdrawal. If payment bounces, the lender can charge one NSF fee (maximum $30) and report the loan to collections. Contact TDFI Consumer Resources (615-741-2236) if you have disputes or complaints.
Alternatives to Payday Loans in Tennessee
Before taking a payday loan in Tennessee, consider these lower-cost alternatives available to Tennessee residents:
💰 Credit Union Payday Alternative Loans (PALs)
- • Max APR: 28% (vs. 191-391% for payday loans)
- • Amounts: $200-$1,000
- • Terms: 1-6 months
- • Example: $500 loan = $12/month vs. $75 payday fee
- • Top Providers: Midsouth Community FCU, Tennessee Valley FCU, Y-12 FCU (Oak Ridge)
📱 Cash Advance Apps
- • Providers: Earnin, Dave, Brigit, Chime SpotMe, MoneyLion
- • Amounts: $20-$250 instant
- • Fees: $0-$10/month subscription (no APR)
- • Best For: Small amounts until next paycheck
- • Available: All Tennessee residents with direct deposit
🏦 Tennessee Extended Payment Plan (EPP)
- • Cost: FREE (zero additional fees)
- • Duration: 60 extra days to repay
- • Eligibility: Once per year, request 2+ days before due date
- • How It Works: Same loan amount + 15% fee, just more time
- • Example: $500 loan = $575 total, now due in 60 days instead of 31
🤝 Tennessee Assistance Programs
- • Tennessee DHS: tn.gov/humanservices (emergency rent/utility help)
- • 211: Dial 211 for statewide emergency assistance referrals
- • United Way of Greater Nashville: Financial counseling + emergency funds
- • Catholic Charities TN: Utility assistance, rent help (locations in all major cities)
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⚖️ Tennessee Payday Loan Compliance & Consumer Protection
Regulatory Oversight: All Tennessee payday lenders must be licensed by the Tennessee Department of Financial Institutions (TDFI) under the Deferred Presentment Services Act (TCA Title 45, Chapter 17). Unlicensed lenders cannot legally operate in Tennessee.
Consumer Protections: Tennessee law limits payday loans to $500 maximum, caps fees at 15% of loan amount (no interest), allows 14-31 day terms, prohibits rollovers (one refinance allowed with 10% principal repayment), enforces one-loan-at-a-time through the Veritec database, caps annual borrowing at $1,875, and mandates a free Extended Payment Plan (EPP) once per year.
File a Complaint: Contact TDFI Consumer Resources at 615-741-2236 or 800-778-4215, or visit tn.gov/tdfi to file complaints about unlicensed lenders, excessive fees, unauthorized withdrawals, harassment, or database violations.
Responsible Borrowing: Only borrow what you can afford to repay in 14-31 days. Payday loans are expensive (191-391% APR) and should be used only for genuine emergencies. Consider lower-cost alternatives like credit union PALs (28% APR max) or cash advance apps. Use the free EPP if you need more time to repay. For free financial counseling, contact Tennessee United Way at 211 or visit nfcc.org to find a certified credit counselor.
About the Author
Rostislav Sikora is a loan industry expert specializing in U.S. consumer credit regulations and payday lending compliance. With expertise in state-by-state lending laws, Rostislav helps consumers understand loan costs, compare options, and navigate financial decisions responsibly.
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