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Usury Laws in Tennessee

Tennessee caps signed written loans at the applicable formula rate (11% as of October 2026), caps other transactions at 10%, lets courts award prejudgment interest of up to 10% when no rate was agreed, and makes willful collection of usury a Class A misdemeanor.

Last checked . General information, not legal advice.

Tennessee at a glance

Maximum agreed rate
11% (formula rate, October 2026)
The formula rate is 4 points over the weekly average prime rate, never above 24%. Transactions not in a signed writing are capped at 10%.
Legal rate (no rate agreed)
Up to 10% (court decides)
With no agreed rate, courts or juries may award prejudgment interest of up to 10% a year.
Criminal usury
Willful collection of usury: Class A misdemeanor

Sources

Last checked

The rules in Tennessee

What is the maximum interest rate on a private loan in Tennessee?

Maximum agreed rate in Tennessee: 11% (formula rate, October 2026). The formula rate is 4 points over the weekly average prime rate, never above 24%. Transactions not in a signed writing are capped at 10%.

What interest rate applies in Tennessee when no rate was agreed?

Legal rate (no rate agreed) in Tennessee: Up to 10% (court decides). With no agreed rate, courts or juries may award prejudgment interest of up to 10% a year.

When is charging high interest a crime in Tennessee?

Criminal usury in Tennessee: Willful collection of usury: Class A misdemeanor.

Where do the Tennessee usury laws come from?

The rules above come from Tenn. Code 47-14-102, Tenn. Code 47-14-103, Tenn. Code 47-14-112 and Tenn. Code 47-14-123. Each source is linked on this page. We last checked them in October 2026.

Good to know

The Tennessee Department of Financial Institutions announced on October 20, 2026 that the formula rate is 11.00%, based on an average prime rate of 7.00%.

What this means in practice

Put the interest rate in writing. Many usury statutes set one limit for written agreements and a different, often lower, rate when nothing was agreed in writing. A signed promissory note or loan agreement that states the rate, the payment schedule and what happens on late payment avoids most disputes.

Count every charge, not only the stated rate. Courts may treat fees, points, required extras or a discount taken from the amount lent as interest when deciding whether a loan is usurious. A loan with a modest rate and large fees can still cross the limit.

Check who the lender is and what the loan is for. Usury limits often do not apply, or apply differently, to banks, licensed consumer lenders, credit card issuers, larger loans and loans to businesses or corporations. A rule written for loans between individuals may not cover your situation, so read the statute and its exceptions.

General information, not legal advice. Laws change, and cities can add their own rules, so check the current statute before you rely on it.