Tennessee Payday Loans

If you are looking for a short-term loan in Tennessee, you may be considering a payday loan or a cash advance. These are two types of loans that allow you to borrow money against your next paycheck, but they have different costs and regulations. Here are some things you should know before you apply for either one.

Payday loans are regulated by the Tennessee Department of Financial Institutions (TDFI). According to the TDFI website, payday loans are also called deferred presentment services or check advance loans. They are legal in Tennessee, but they have some restrictions:

- You can borrow up to $500 at a time.

- You can only have one outstanding payday loan at a time.

- You can only renew or roll over your loan twice, for a total of three transactions.

- You have to repay your loan within 31 days.

- The maximum finance charge is 15% of the face value of the check, which means an annual percentage rate (APR) of 459% for a 14-day loan.

Cash advances are app-based services that let you access your earned wages before your payday. They are not regulated by the TDFI, but they may have their own fees and terms. Some of the popular cash advance apps in Tennessee are Earnin, PayActiv and Dave. They have different features and requirements, but they generally work like this:

- You link your bank account and your employer's payroll system to the app.

- You request an advance of up to $100 or $500, depending on the app and your income.

- You receive the money in your bank account within one or two business days, or instantly for a small fee.

- You repay the advance automatically from your next paycheck, plus a voluntary tip or a monthly membership fee.

Cash advances may seem cheaper than payday loans, but they can still be expensive if you use them frequently or tip generously. Forbes reports that some cash advance apps charge effective APRs of over 400%. Additionally, they may not help you build credit or improve your financial habits.

Before you take out a payday loan or a cash advance in Tennessee, you should consider other options, such as:

- Asking your employer for an advance or more flexible payment schedule.

- Seeking help from local nonprofits, charities or faith-based organizations.

- Applying for a personal loan from a bank, credit union or online lender.

- Using a credit card or a cash advance from a credit card, if you have one.

- Borrowing money from your friends or family.

Payday loans and cash advances can provide quick cash in an emergency, but they come with high costs and risks. You should only use them as a last resort and pay them back as soon as possible. Otherwise, you may end up in a cycle of debt that is hard to break.