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Published on May 29, 2024
Tennessee Loan Interest Rates Rise to 12.50% in Response to Federal Prime Rate HikeSource: Google Street View

Tennessee borrowers can expect to pay more for their loans as the ceiling on interest rates gets a nudge. Commissioner Greg Gonzales of the Tennessee Department of Financial Institutions dropped the news that effective immediately, the maximum legal interest rate for loans in the Volunteer State has soared to 12.50 percent per annum, according to the Tennessee Department of Financial Institutions.

This latest financial move comes as a response to an increase in the weekly average prime loan rate, now at a hefty 8.50 percent, as reported by the Federal Reserve just yesterday. Gonzales' decision banks on a system that caps the rate at 4 percent above the Federal prime rate. It is an equation that reads more than mere numbers; it signals a climate of rising costs for consumers reaching for anything from emergency funds to a mortgage.

"The rate remains in effect until the average prime loan rate as announced by the Federal Reserve Bank changes," Gonzales stated, as per the formula laid down by legislation. Keeping to the spirit of Chapter 464, Public Acts of 1983, which demands weekly updates, market watchers and wallet holders alike are keeping a keener eye on these financial barometers, as cited by the Tennessee Department of Financial Institutions.