Tennessee -Tennessee Department of Financial Institutions Commissioner Greg Gonzales announced Monday that the state’s maximum effective formula rate of interest has been set at 11.50 percent per annum.
This rate is calculated based on a statutory ceiling of 4 percent above the weekly average prime loan rate, which was reported at 7.50 percent by the Federal Reserve on April 28, 2025. As such, the effective maximum interest rate is determined to be 11.50 percent.
Commissioner Gonzales noted that this rate will remain in effect until the Federal Reserve announces a change to the prime loan rate.
The Tennessee General Assembly’s Chapter 464, Public Acts of 1983, mandates that the Department of Financial Institutions provide weekly updates on the formula rate to ensure transparency and compliance with state lending laws.
The formula rate of interest impacts a variety of financial transactions in the state, including certain types of consumer and commercial loans. Lenders are expected to adhere to the updated maximum rate to remain within the bounds of Tennessee law.
The Department of Financial Institutions will continue to monitor changes in the prime rate and release updates as required.