The term "usurious" refers to practices that greatly exceed reasonable limits, particularly in the context of charging excessively high interest rates on loans. It often describes interest rates that surpass the maximum allowed by law, making such practices illegal in many jurisdictions. In essence, usurious interest rates take advantage of borrowers by imposing unfair financial burdens.
Usurious practices are primarily relevant in the areas of finance and consumer protection law. Legal frameworks exist to protect borrowers from excessively high interest rates, which can lead to financial hardship. Users may encounter usurious terms when dealing with loans, credit agreements, or other financial contracts. Legal templates from US Legal Forms can assist individuals in understanding their rights and obligations related to usurious practices.
Here are a couple of examples of abatement:
Example 1: A lender charges an interest rate of 25 percent on a personal loan, while the legal limit in the borrower's state is 15 percent. This would be considered usurious.
Example 2: A payday loan company advertises a loan with an annual percentage rate (APR) of 400 percent, which far exceeds legal limits and constitutes usury. (hypothetical example)
| State | Maximum Interest Rate | Notes |
|---|---|---|
| California | 10 percent | Higher rates apply to certain types of loans. |
| New York | 16 percent | Strict enforcement of usury laws. |
| Texas | 10 percent | Different limits for various loan types. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition |
|---|---|
| Usury | Charging excessively high interest rates beyond legal limits. |
| Predatory lending | Unfair, deceptive, or fraudulent practices in lending, often targeting vulnerable borrowers. |
| Interest rate | The percentage charged on a loan, which can be legal or usurious depending on the amount. |
If you believe you are being charged a usurious interest rate, take the following steps:
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A usurious interest rate is one that exceeds the legal limit set by state law.