Banks and credit unions are two of the most common sources of consumer and business loans. These loans may be secured or unsecured, and may take the form of home mortgages, home equity loans, installment loans (loans repaid in monthly installments), auto loans, student loans, and credit cards.
In Tennessee, banks and credit unions are regulated entities that provide various loan products to consumers and businesses. Secured loans, such as home mortgages and auto loans, require collateral, whereas unsecured loans, like most credit cards and some personal loans, do not. Home equity loans allow homeowners to borrow against the equity in their property. Installment loans are repaid over time with a set number of scheduled payments. Student loans can be obtained through private lenders or government programs. Tennessee follows both federal regulations and state statutes governing lending practices, interest rates, and consumer protections. The Tennessee Department of Financial Institutions oversees state-chartered banks and credit unions, ensuring compliance with applicable laws and regulations. Borrowers in Tennessee are protected under the federal Truth in Lending Act (TILA), which requires lenders to disclose terms and costs of loans, and the Fair Credit Reporting Act (FCRA), which governs the collection and use of credit information.