Usury

Last Updated: Jun 7, 2019

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Usury refers to interest rates that are significantly above current market rates. These are often higher than the rates allowed by law and are often charged by unsecured lenders.

Interest rates in consumer credit contracts are controlled by state law, and the highest permitted rate is called the usury ceiling. This is the maximum rate of interest that lenders (including credit card companies) can charge on consumer credit. Although usury ceilings vary, they can exceed 20%. Most state laws have penalties for illegal interest, ranging from forfeiture of interest owed on a loan balance to forfeiture of all amounts owed.