Need a $2500 Payday Loan?

It cost one Tennessee borrower $14,000

Andy Spears
3 min readJul 27, 2022


Photo by Daniel Thomas on Unsplash

The need for short-term cash in the form of small loans is growing — especially with current inflation rates and wage stagnation.

Payday loan stores sometimes fill-in the gap — but typically charge very high interest rates, usually at triple digits.

While some states have implemented rate caps and key consumer protections — both preserving access to credit and creating a more affordable source of emergency cash, Tennessee is not among them.

Adam Friedman in The Tennessean digs deep into the payday lending industry in Tennessee, exploring both the impact on borrowers and the influence the industry has over lawmakers.

His piece details the story of one borrower who needed some short-term cash and ended up owing $14,000 on $2500 he borrowed.

Here’s a quick summary of what happened to former business owner Carlos Restrepo:

After defaulting on the loan, Advance Financial sued him, and according to court documents, he will pay back roughly $14,000 on a $2,500 loan. Restrepo will pay over five times the amount of the initial loan thanks to an interest rate made legal by Tennessee lawmakers.

Payday lenders are allowed to offer “flexible credit” or “flex loans” at rates up to 279% APR.

As Friedman notes, this is legal because Tennessee lawmakers opened the door to payday lending and because the payday loan industry’s lobbyists spend heavily to keep the cash flowing without any pesky consumer protections.

You see, payday lenders are the top donors in Tennessee political campaigns.

Friedman notes:

An investigation by The Tennessean found that by using a half dozen political action committees (PACs), these companies have given Tennessee politicians $4.4 million over the past 10 years. Simultaneously, they’ve spent another $10.4 million hiring some of Nashville’s top lobbying firms to…



Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .