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The amount of interest a creditor may charge is limited by state laws, but there’s a big catch: consumers often agree to pay a higher interest rate by agreeing to the terms offered, thus waiting any statutory limits. Additionally, most state laws limiting interest rates have exceptions. In Tennessee, for instance, the legal amount of interest… Read More »
As background, a confession of judgment is a contract provision (or a stand-alone contract) in which one party agrees on the front-end of a transaction to let the other party enter a judgment against him if the deal goes bad. You agree, in advance and before any default or dispute arises, that the other party… Read More »
AN ACT to amend Tennessee Code Annotated, Title 45, Chapter 5, relative to lending. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE: SECTION 1. Tennessee Code Annotated, Section 45-5-102, is amended by adding the following as a new subdivision: ( ) “Amount financed” means the amount financed as disclosed under the… Read More »
Additional details about Tennessee’s laws limiting interest rates, and links to relevant code sections, can be found in the following table.
|Legal Maximum Rate of Interest||10% (§47-14-103)|
|Penalty for Usury (Unlawful Interest Rate)||Contract unenforceable; if found unconscionable, lender must refund charges, fees, and commission fees and successful plaintiff may recover reasonable attorney’s fees (§47-14-117); willful collection is a Class A misdemeanor (§47-14-112)|
|Interest Rates on Judgments||10% or at contract rate (§47-14-121)|
|Exceptions||Installment loans (§45-2-1106); loans under $1000; (§47-14-104); savings and loans (§45-3-705); single payment loans §(47-14-104)|
Tennessee Commercial Code
Title 47 – Commercial Instruments And Transactions
Chapter 14 – Interest Rates Generally
- § 47-14-101 – Judgments rendered in dollars and cents.
- § 47-14-102 – Definitions.
- § 47-14-103 – Maximum effective rates generally.
- § 47-14-104 – Single payment loans.
- § 47-14-105 – Announcement and publication of formula rates — Reliance thereon.
- § 47-14-106 – Contracts for applicable formula rates of interest.
- § 47-14-107 – Computation of interest — Installment loans.
- § 47-14-108 – Prepayment of loans — Contracts restricting prepayment of loans.
- § 47-14-109 – When interest accrues.
- § 47-14-110 – Usury as a defense.
- § 47-14-111 – Actions to recover usury.
- § 47-14-112 – Usury a misdemeanor — Penalty.
- § 47-14-113 – Limitations on loan charges, commitment fees and brokerage commissions.
- § 47-14-114 – Actions to recover excess loan charges, commitment fees, or brokerage commissions.
- § 47-14-115 – Usury or excess charges — Equitable remedies.
- § 47-14-116 – Usury or excessive charges — Reliance on statute, rule, or order.
- § 47-14-117 – Usury or excessive charges — Contracts.
- § 47-14-118 – Usury or excessive charges — Statute of limitations.
- § 47-14-119 – Choice of laws.
- § 47-14-120 – Time-price differential.
- § 47-14-121 – Interest on judgments — Rate.
- § 47-14-122 – Interest on judgments — Computation.
- § 47-14-123 – Prejudgment interest.
- § 47-14-124 – Rates fixed by other statutes.
- § 47-14-125 – Compliance with federal Consumer Credit Protection Act.