Tennessee § 47-14-106 - Contracts for applicable formula rates of interest.

§ 47-14-106. Contracts for applicable formula rates of interest.

Contracts to which the applicable formula rate provided in § 47-14-103(2) applies may provide for the payment of a fixed rate of interest, a variable rate of interest or any combination of fixed and variable rates in any sequence, subject to this section. A contract may provide for a fixed rate of interest: Permissible at the time the contract to make the loan is executed; Permissible at the time the loan is made; Permissible at the time the interest rate on the loan is converted from a variable to a fixed rate, or from one fixed rate to another fixed rate, whether such conversion is by terms of the contract or by renewal, modification, extension or otherwise; or Permissible at the time of any renewal or extension of the loan or any note evidencing the loan; or Permissible by virtue of any combination of any of the foregoing. A contract may provide for a rate of interest that may vary from time to time at such regular or irregular intervals as may be agreed by the parties; provided, that such variable rate shall not exceed the greater of: That authorized by statute at the agreed time of each variance; or That authorized at the time of execution of the contract or note evidencing the indebtedness upon which such variable rate is or is to be charged; The parties may agree to a minimum fixed rate of interest to be applicable to a rate which is or may become otherwise variable; provided, that such agreed minimum fixed rate of interest does not exceed the rate permitted at the time the contract to make the loan is executed, or at the time the note is executed, or at the time of any renewal or extension thereof, whichever is greater. Acts 1979, ch. 203, § 5; 1992, ch. 629, § 1. Compiler's Notes. Former §§ 47-14-102 — 47-14-118 (Acts 1786, ch. 4, § 5; Acts 1803, ch. 6, § 1; Acts 1835-1836, ch. 50, §§ 1-5; Acts 1843-1844, ch. 181; Code 1858, §§ 1943-1955; Acts 1899, ch. 189, § 1; Acts 1901, ch. 60, § 1; Acts 1903, ch. 439, § 1; Shannon §§ 3491a1, 3492, 3493, 3493al, 3494-3504, 3504a1; Williams §§ 7300- 7303, 7305-7316; Code 1932, §§ 7300-7303, 7305-7316; T.C.A. (orig. ed.), 47-1602 — 47- 1618; Acts 1963, ch. 81, § 1(10-104(3)); Acts 1967, ch. 217, § 1; Acts 1969, ch. 61, § 1; Acts 1976, ch. 844, § 1) were repealed by Acts 1979, ch. 203, § 24 and present §§ 47-14-102 — 47-14-124 substituted therefor. Acts 1992, ch. 629, § 3 provided that the amendments by that act to this section and § 47-15-104 apply both to existing loans and existing contracts to make loans, as well as loans made and contracts to make loans after April 8, 1992, it being the legislative intent that the amendments by that act express the true meaning and intent of this section and § 47-15-104 , as originally adopted. Cross-References. Home loan contract provisions, § 47-15-104 . Cited: J & B Invs., LLC v. Surti, 258 S.W.3d 127, 2007 Tenn. App. LEXIS 816 (Tenn. Ct. App. Dec. 27, 2007).