Tennesseans looking to borrow may find themselves facing a higher ceiling on interest rates, as announced by Commissioner of Financial Institutions Greg Gonzales. With the new maximum effective formula rate now at 11.15 percent per annum, borrowers need to brace for increased costs on loans. This update, effective as of today, November 4, 2025, directly ties to a 4 percent increase above the then-current weekly average prime loan rate of 7.15 percent, a figure monitored and published by the Federal Reserve.
Commissioner Gonzales underscored the significance of this announcement, noting that the adjusted rate "remains in effect until the average prime loan rate as announced by the Federal Reserve Bank changes," as mentioned on the Tennessee Department of Financial Institutions website. This fluctuating approach is set to potentially adjust weekly, echoing the variable nature of the financial landscape. The basis for this financial tool is derived from Chapter 464, Public Acts of 1983, which mandates the commissioner to weekly, update and announce the formula rate of interest to keep abreast with the economic indices.
For detailed information and the latest updates on the formula rate of interest, interested parties can contact Alica Owen, Public Information Officer at the Tennessee Department of Financial Institutions, or visit their official website.
