Usury Laws

Protection Against Excessive Interest Rates

Usury laws specify and regulate the amount of interest that can be legally charged on a loan.

By design, these regulations target the act of charging excessively high interest rates on loans by placing caps on the maximum interest that can be collected. These laws are in place to protect consumers and investors from predatory lenders.

In the United States, usury laws are determined on a state-by-state basis. Although the federal government can, in theory, regulate rates via the Constitution’s interstate commerce clause, in practice it has generally deferred to the states to set and enforce their own interest rate regulations.

Each state then is responsible for drafting and enforcing its own usury law, specifying both the maximum interest rate and any specific limits.

For real estate investors seeking financing for potential properties, it is important to keep abreast of every state’s usury laws in order to anticipate the amount of interest you may potentially face from lenders dependent on location.


Anderson Business Advisors

Below is a chart showing each state’s usury limits and rate of interest.

2017 Legal Rate of Interest and Usury Limits

StateStatuteLegal Rate of InterestUsury Limits
AlabamaCode of Ala. § 8-8-16%8%
AlaskaAlaska Stat. § 45.45.01010.50%5% over Fed Res Interest rate*
ArizonaA.R.S § 44-120110%No maximum provided
ArkansasA.C.A. § 4-57-101/Ark Const. Amendment 89, § 36%17%
CaliforniaCal Civ Code § 1916.12-17%12%
ColoradoC.R.S. 5-12-101, 1038% (compounded)45%
ConnecticutConn. Gen. Stat. § 37-1, 48%12%
Delaware6 Del. C. § 23015% over Fed Res rate5% over Fed Res Interest rate*
D.C.D.C. Code § 28-3301, 26%24%
FloridaFla. Stat. § 687.02, .07118%over $500,000 is 25%*
GeorgiaO.C.G.A § 7-4-27% (simple)$3000 or less 16%, other contracts no maximum*
HawaiiHRS § 478-210%10%
IdahoIdaho Code § 28-22-10412%No maximum provided
Illinois815 ILCS 205/1, 45%9%
IndianaBurns ind. Code Ann. § 24-4.6-1-101, 28%Presumed 8% if contested*
IowaIowa Code § 535.25%2% over Fed Res Interest Rate*
KansasK.S.A. § 16-201, 20710%15%
KentuckyKRS § 360.0108%19%, over $15,000 no maximum
LouisianaLa. R.S. § 9:350012%No maximum provided for business purpose
Maine9-B M.R.S. § 4326%Loan secured by interest in real estate, no max*
MarylandMd. COMMERCIAL LAW Code Ann. § 12-102, 36%8%*
MassachusettsALM GL ch. 107, § 3 / ALM GL ch. 271, § 496%20%
MichiganMCLS § 438.315%7%
MinnesotaMinn. Stat. § 334.016%8%
MississippiMiss. Code Ann. § 75-17-18%The greater of 15% or 5% above discount rate*
Missouri§ 408.030 R.S.Mo.9%The greater of 10% or "market rate"*
Montana31-1-106, MCA / 31-1-107, MCA10%The greater of 15% or 6% of prime rate*
NebraskaR.R.S. Neb. § 45-101.03, 1026%16%
NevadaNev. Rev. Stat. Ann. § 99.0402% plus prime NV*No maximum provided
New HampshireRSA Tit. XXXI, Ch. 336:1 10%No maximum provided
New JerseyN.J. Stat. § 31:1-16%16%*
New MexicoN.M. Stat. Ann. § 56-8-315%No maximum provided
New YorkNY CLS Gen Oblig § 5-501 / NY CLS Bank § 14-a6%16%*
North CarolinaN.C. Gen. Stat. § 24-1, 1.18%6% over T-Bills, or if over $25,000 No maximum*
North DakotaN.D. Cent. Code, § 47-14-096%5.5% over T-Bills*
OhioORC Ann. 1343.018%No maximum provided but with stipulations*
OklahomaOkl. Const. Art. XIV, § 26%10%
OregonORS § 82.0109%$50,000 or less 12% or 5% over discount rate*
Pennsylvania41 P.S. § 2016%No maximum on $35,000 or more*
Rhode IslandR.I. Gen Laws § 6-26-112%The greater of 21% or 9% over domestic prime
South CarolinaS.C. Code Ann. § 34-31-208.75%No maximum provided
South DakotaS.D. Codified Laws § 54-3-4 and 1612%No maximum provided
TennesseeTenn. Code Ann. §47-14-103/ § 45-2-110610%18% varies*
TexasTex. Fin. Code § 302.002 / § 303.0096%28%*
UtahUtah Code Ann. § 15-1-110%No maximum provided
Vermont9 V.S.A. § 41a12%24% varies*
VirginiaVa. Code Ann. § 6.2-3016%No maximum provided
WashingtonRev. Code Wash. (ARCW) § 19.52.010, .02012%The greater of 12% or 4% above T-bills*
West VirginiaW. Va. Code § 47-6-56%8%
WisconsinWis. Stat. § 138.04, 55%12%*
WyomingWyo. Stat. § 40-14-1067%No maximum provided

*Requires interpretation of the statutory law for accurate percentages. Consult an attorney for statutory interpretations of the law provided above.

These percentages are ever-changing.  If you have specific questions, you should consult an attorney and/or look to the current state codes for the most current statutes.  All amounts are stated in general terms as state specific variations to client specific scenarios will most likely apply.