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Tennessee Installment Loans - Laws Restrictions And Allowances
Tennessee Installment Loans are available to people who need to borrow some money as they wait for the payday. Installment Loans are very helpful especially when one need cash to settle emergencies.
However, Installment Loans company charge a very high interest rate which could lead you into deeper financial problems. Tennessee is one of the 25 states which regulate payday lenders in a bid to protect debtors from paying very high interest. The state also protects the debtors from unfair debt collection methods which are used by some lenders.
The state of Tennessee has set $500 as the maximum amount of Installment Loan that one can apply for. Payday lenders charges high interest rates and also expect you to pay full loan amount plus interest on your next payday.
If there is no maximum amount that one can borrow, some debtors will borrow too much money which means that they will spend their entire paycheck to pay for the loan. This means that they will be left in deeper financial problem which will lead them to apply for more Installment Loans. Debtors are allowed to apply for up to three Installment Loans as long as the total amount does not surpass the maximum of $500.
Tennessee regulates the maximum amount of interest that payday installment loans lenders can charge their clients. The interest rate must not exceed 15% of the entire loan or $30. For example if you have taken a Installment Loan of $450, the lender cannot charge you more than $30 although 15% of $450 is $67.5. It is important to note that the maximum amount that lenders can pay from a loan above $200 is $30.
Most Tennessee Installment Loans lenders accept checks for the repayment of Installment Loans. In case the check bounces, the lender is only allowed to charge you a onetime $30 plus any other fee that banks charges for bounced checks.
In the case of bounced checks, the lender cannot press criminal charges against you by the virtue that you have written a bad check. In such circumstances, the lender is allowed to sue you in a civil court for the loan amount as well as for damages
Payday lenders are required by law to post their licenses in a conspicuous place where the debtors can easily see them. If the loan applicant is successful, the lender must provide the applicant with written information detailing the terms of agreement.
If the applicant agrees to the terms, he will then put down a signature to commit him to the agreed terms. The written information must contain the amount of the loan, the interest and fees payable as well as the time when the debtor should pay back the loan.
All payday lenders are required to get a license from the Tennessee Department of Financial Institutions. This requirement is meant to prevent debtors from unscrupulous lenders and also allows the government to provide effective oversight of all the lenders in Tennessee.
For an organization to qualify for this license, it must have a net worth of not less than $25,000. Licenses are available at $500 and must be renewed on a yearly basis.