Tennessee Payday Loan Laws and Protections
A consumer guide to Tennessee's deferred-presentment fees, term, aggregate limit, outstanding-check rules, disclosures, and rollover ban.
How Payday Loans Work in Tennessee
Title 45, Chapter 17 of the Tennessee Code places these transactions. A company that provides one to a Tennessee consumer must be licensed by the state financial regulator even if the business is conducted over the Internet, by telephone, or by fax.
Customers provide lenders with a post-dated check or an electronic form of later-presentment authorization. The lender may take the fee from the cash given. Because of this, the check amount may exceed the amount the customer actually receives in cash.
Fee, Term, and Aggregate Limits
The charge shall be no greater than 15 cents for each dollar amount stated on the check. The company may not delay presenting the check for more than 31 days. Throughout the state, a customer's total exposure from all outstanding checks cannot exceed $500.
As an example, say a check is written for $500. If a consumer receives $425 after a $75 fee is withheld, the consumer must pay back the full $500. Before signing anything, compare the cash received, dollar fee, total due, due date, and annual percentage rate.
Limits on Outstanding Checks
No payment item may be accepted if three remain open statewide. Within one company or a commonly controlled group, the count stops at two items. The printed amounts on all open items together must be equal to or less than $500.
These restrictions effect all lenders. A consumer should not assume that if a lender has approved a credit request, then the repayment amount will be affordable to the consumer.
No Rollovers or Same-Lender Refinancing
The same organization cannot provide financing for a replacement advance for the purpose of refinancing or consolidating the current agreement. If they do so, the replacement becomes unenforceable, and the organization will lose the right to recover the money and the charge associated with it.
The law also prohibits taking security or a guaranty for the obligation and prohibits unfair or deceptive acts. The agreement must be reviewed scrupulously; it must detail the date the transaction occurs, the presentment date, the face value, the fee, and mandated disclosures to the consumer.
If a Check Is Returned
If a payment item is returned, the company may file a suit for the payment item and the actual costs incurred for the court case. The company cannot add any additional costs under the Tennessee statute pertaining to handling or attorney fees. Furthermore, the customer cannot be convicted of the bad check violation in this chapter if this transaction is the source of the check item.
Before the due date, reach out to the licensee if you think repayment will be unsuccessful and find out what written arrangements they have. Compare any proposed arrangements to the essentials and understand the consequences of a missed loan payment.
Before Borrowing in Tennessee
Before you share any sensitive personal or banking information, confirm that the lending institution is a licensed lender. Review the privacy notice and electronic-fund authorization agreement. There should be enough money after repayment for living expenses. If a lender is asking for a gift card, wire transfer, or cryptocurrency as an upfront fee for a loan, consider this a loan scam.
Tennessee Payday Loan Laws & Regulations
Compliance is reviewed by the state examiners. The outer limits of the law are illustrated in the summary table. If there's an individual agreement, it may offer a lesser limit, so it should be examined individually.
| Regulation | Tennessee Rule |
|---|---|
| Governing law | Tennessee Code Title 45, Chapter 17. |
| Regulator | The state's financial authority. |
| Aggregate outstanding limit | Checks held by all providers cannot total more than $500. |
| Maximum fee | No more than 15 cents for each dollar amount stated on the check. |
| Maximum term | A check may not be held more than 31 days. |
| Outstanding-check limit | Up to three open checks, and only two with one provider or other providers affiliated with or controlled by that provider. |
| Renewal or consolidation | A new advance cannot be given by the same provider to renew or consolidate the funded advance. |
| Written disclosures | The contract stipulates each transaction and deposit date, check value, fee, cost, and risk warning. |
| Security or guaranty | Third-party guarantees and collateral are not allowed. |
| Returned check | Handling and attorney fees are excluded; however, court expenses and the item's printed amount may be pursued through civil collection. |
For the current requirements, check the state law-and-rules directory. The provider licensing page has regulatory and application information.
Regulatory and legal links were reviewed September 7, 2026. Changes may occur in state laws and regulatory directions.