News & Resources

Short term loans increased in Tennessee

Aug 23, 2011 Mike Garretson

Short term loan laws vary from state to state, while they are illegal in 15 of them. The increased limits of short term loans in Tennessee aim to help the consumer, but also come with mixed opinions from financial experts, Nashville Ledger reports. The benefit of a short term loan for the consumer is that it's easy to apply for and the money is often received within 24 hours, according to Chartered Financial Analyst. Typically, a consumer will request a loan of a couple hundred dollars and be charged $15 per every $100 they borrow, as well as interest. Tennessee recently passed legislation that increased the short term loan limit to $500. While the new limit does benefit the consumer, especially in today's struggling economy, Kathleen Calligan who works for the Better Business Bureau believes this may increase the chances of another debt cycle. "[Short term loans] took off in the 90s, and it has exploded not only in Nashville but across the country," she said. "Unfortunately, so many states have pretty much wrapped their arms around this industry and have given them special privileges and considerations. They don’t have to abide by the rules that other financial institutions have to." While the increased limit may be controversial, some citizens of Tennessee may view this as a great opportunity for some quick cash in a financially unstable time.