Tennessee currently does allow for payday loans but there are some stipulations. Currently a payday loan amount in Tennessee cannot exceed $500 and the maximum APR is 460%. Additionally, the maximum loan term is 31 days (with no rollovers allowed), and the finance charges cannot exceed $17.65 for every $100 borrowed. As a borrower, you may look at these rules and think that they are limiting, but actually they exist to protect consumers. When looking for payday loans in other states you will also find that there are some state specific rules. While some states don’t allow payday loans altogether.
Payday loans are short-term loan options that make it possible for bad credit borrowers to get a small amount of loan funding. Most lenders usually don’t even check their borrower’s credit scores, and because of that they may attract borrowers with things like past bankruptcies, defaults, etc. And to these borrowers a payday loan may seem like the only viable lending option.
Although they can be fast, convenient, and seemingly flexible, payday loans in Tennessee come with extremely high interest rates. Because of their incredibly high cost, borrowers who take out these loans can end up in a cycle of debt and hurt their credit scores even further. These harmful effects aren’t temporary either, a single missed payment will stay on your credit report for up to 7 years! Loan default can be even more detrimental. Not only that, payday loans come with extremely short repayment periods, usually just a few weeks. And at first it may not seem too difficult to pay back the amount borrowed, but interest rates and fees coupled with the principal can increase that cost considerably. A primary reason why a payday loan can be extremely difficult to pay back on time.
And so, you will want to avoid payday loans even if they may seem like the quickest solution when you need to help financially. Instead, check out options like bad credit personal loans in Tennessee. They have significantly lower interest rates and more manageable repayment terms, even for borrowers with no credit history. And because many of these lenders exist online, they can operate as quickly as any payday loan organization—without all that extra cost.