18,000 vehicles repossessed by title lenders in Tennessee.

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MURFEESBORO, Tenn. (WMOT/TNS) — Eighteen states and the District of Columbia ban high-cost payday loans, but short-term lenders are thriving in Tennessee.

Currently, lenders can charge up to 375% interest.

A bill that would have capped the interest rate charged by payday lenders at 28% was considered during the just-ended legislative session, but was never sent from committee. Andy Spears of Tennessee Citizen Action says payday loans target people who have run out of options.

“People go to these places when there’s nowhere else to turn for money. It’s really kind of a last ditch effort to get out of a tight spot, so I don’t think that people should be trapped in a cycle of debt.”

Spears says that if you need cash fast, it’s important to exhaust all your options before approaching a payday lender.

“They should try all the other options first. Ask your friend, ask a boss, ask a family member, and I’d be much more comfortable with payday lenders if you could cap their rates. of interest.”

The Consumer Federation of America also warns against car title loans and tax refund anticipation. In Tennessee, in just one year, more than 18,000 cars were repossessed by car title lending companies.

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