Prepayment Penalty Rules for DSCR Loans in Tennessee

Prepayment Penalties are Fully Allowed with no restrictions for DSCR Loans in Tennessee. Tennessee law imposes for loans made for business or investment purposes. The state's consumer protection statutes apply only to personal-use lending, meaning DSCR loans, which are strictly for investment use, are not affected, either when used to finance long-term or short-term rentals "STRs" in the Volunteer State. Consequently, DSCR Lenders can typically offer all standard prepayment penalty options such as Descending Prepay Penalties (i.e. “5/4/3/2/1”), Flat Prepay (i.e. 5/5/5/5/5) or other tailored structures in Tennessee.

Complete 2026 Guide To DSCR Loan Prepayment Penalties

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