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Payday Loans in Tennessee

A payday loan is a small-dollar loan issued until your next paycheck, typically from two to four weeks. Despite relatively high-interest rates, payday loans may come into practice when you need quick cash to tackle emergency expenses arising unexpectedly. Additionally, a payday loan is a non-priority debt; thus, you cannot lose your home or otherwise go to prison for non-payment. However, if you don't want to opt for short-term lending, you are free to go for payday loan alternatives described below. 

The Most Common Payday Loan Alternatives in Tennessee? 

Installment Loans 
Payday loan alternatives usually come in unsecured installment loans meaning that you don't need to put up valuable assets in exchange for quick cash. So personal loans are probably one of the best alternatives to a payday loan. Especially with the increase of online lending, you can take out a loan online and get your money deposited into your account in as little as a business day. However, it makes a lot of financial sense to compare credit terms and requirements across multiple lenders to determine whether the best match your profile.

Credit Cards
Another payday loan alternative is with your credit card. Not only are interest rates and APRs a lot more favorable when it comes to a credit card versus a payday loan there is also a benefit of flexibility you might find helpful. For example, if you take out money with a payday loan and don't use all of it, you still have to pay for that entire amount. When it comes to a credit card, you would only pay for the amount you factually borrowed. 

A Payday Alternative Loan (PAL)
National credit union association (NCUA) created a PAL, which helps people go through tough financial times by offering them better interest rates than a typical payday loan. You can expect to receive up to three loans in six months as long as the loans don't overlap and the balance doesn't roll over. So if you only need a small amount and can pay it off quickly, the PAL is a good option for you. 

What to Consider when Deciding on a Payday Loan Alternative? 

Be informed that interest rates can vary depending on the payday loan alternative of your choosing. Your interest rate is typically determined based on a couple of factors, such as your credit history, loan amount, and loan duration. When you apply for a loan, you might notice the APR differs from what is quoted in the interest rate. This is because the APR also includes additional fees that might come with the loan. The APR is a precise estimation of the cost of borrowing you will end up paying. If you have bad credit, you might get rejected for quick funding offered by traditional lenders; thus, opting for a bad credit loan may be a good option worth examining. However, note that bad credit lenders may charge higher interest rates and loan origination fees than traditional brick-and-mortar lenders.


As a result of changes CFPB has made, from July 2020 the lenders don't have to check if the borrower is able to repay the loan. Thus, we encourage you to be careful and make sure you can afford the loan before applying.

Regulations of Payday Loans in Tennessee
Status     Legal
Annual Percentage Rate (APR)     460%
Minimum Loan Amount     N/A
Maximum Loan Amount     $500
Minimum Loan Term     N/A
Maximum Loan Term     31 days
Number of Rollovers Allowed     N/A
Finance Charges     15% of the amount of the check $17.65 for $100 borrowed
Cooling-off Period     N/A

Useful Sources

Real interest rate map /PDF/ of payday loans in the United States calculated on a typical loan.

Payday loans regulation /PDF/ by state 2020.

In the state of Tennessee payday lending is legal according to Tenn. Code Ann. 45-17-101 et seq..
The Consumer Financial Protection Bureau (CFPB) makes the financial marketplace work more effectively and educates consumers to help them take more control over their financial lives. Click here to learn more.
The Department of Financial Institutions regulates the payday lending industry in the state of Tennessee.

[ Updated on 14-Oct-2021, 23:10 ]

We've been in the industry for more than six years.