Tennessee Payday Loans Unfiltered
If you need a fast cash loan to help you to pay necessary living expenses until your next paycheck comes in, you may have limited options available to you. Many people are unable to obtain credit cards as a result of bad credit or other problems, and it can also take a long time to obtain a credit card so you may not get the money when you need it. Loans from banks are generally also intended more to meet long - term needs than to meet short - term needs and can be difficult to qualify for if you have less - than - perfect credit.
For those who find themselves in a situation where they need cash, the challenges associated with bank loans and credit cards often mean that the best option is a payday loan. A payday loan is specifically intended to be a short - term loan that gives you the money you need until your next paycheck comes in. Payday loans are typically very easy to qualify for, with no credit checks and with no focus on what your past credit score is. A reliable job with paystubs and a bank account are generally sufficient to allow a person to qualify for and obtain a payday loan. Furthermore, these loans can usually be obtained instantly, which means that you can go and get a loan and walk out with the cash you need right away.
The speed, convenience and easy qualifying requirements make quick loans a viable and attractive choice for many. Unfortunately, there are also some downsides associated with taking on a payday loan as well.
The biggest issue in most cases is that there are high fees and/or finance charges associated with taking out a payday loan. On a short - term loan, for example, you might pay 17.5 percent in fees and costs. When you consider that the loan lasts for only a week or two and is generally for a small amount of money, you could easily end up with a loan that has an effective annual percentage rate of over 450 percent.
The annual percentage rate is the cost of borrowing money, much like interest on a mortgage or a credit card. However, when most credit cards have an APR below 30 percent, the costs of taking on a payday loan are generally significantly higher.
This doesn't mean that it never makes sense to take a payday loan. There may be scenarios such as when you can't get to work because of a broken car that it makes sense to take on a payday loan so you have the money you need to pay necessary bills. However, you should take on payday loans only if you truly need them and you should be aware of the fact that you can fall into a financial trap if you find yourself taking on loans that you cannot pay back and that you need to renew week after week.
Tennessee Payday Loan Laws
Because of the high rates of payday loans, many lawmakers view these loans as predatory. As such, lawmakers have imposed limitations in many different states in order to make sure that those taking on payday loans have certain protections. There are several limitations on Tennessee fast cash loan industry.
Tennessee is one of several states that have specifically passed statutes authorizing payday lending but setting limits to try to protect consumers. Many other lenders address payday loan issues in their Small Loan Acts, but Tennessee has dedicated legislation just related to this issue.
Fast cash Tennessee lender laws limit the amount that a person can take on a payday loan to $500. The maximum term limit for payday loans in the state is set at 31 days. The fee is limited to 15 percent of the face amount of the check.
While these laws go a long way towards protecting Tennessee consumers by making sure they cannot take very large loans and renew them indefinitely, the laws do not prevent payday lenders from charging very high annual percentage rates. In fact, for a $100 loan that is taken for 14 days, the effective annual percentage rate in Tennessee can be as high as 459 percent.
Stay Educated About Tennessee Payday Loans
It is important to be aware of the Tennessee laws on payday loans so you can better understand the risks you face when you take on this type of loan. While you do enjoy some protections under the law, the law still does not resolve the most egregious feature of payday loans: the extremely high interest rates. Before taking on a payday loan, you must understand the impact of these rates and be prepared to cope with the financial implications this high interest rate can have on your budget.