The legal prejudgment rate of interest is 6% per annum, unless the parties have contracted for a different rate. A written contract may provide for a rate of interest of up to 8% per annum, unless one of the following exceptions apply:
- In a consumer credit transaction, such as an open end consumer credit agreement, the creditor can charge interest at the rate of 1.5% per month or 18% per annum, with some exceptions;
- in a business or agricultural loan transaction, the maximum interest rate is 4.5% over the prevailing federal district rate;
- in a new vehicle auto loan transaction, the maximum rate of interest is 18% per annum; and
- in a used vehicle auto loan transaction, the maximum rate of interest is 23.25% per annum.
You should note, however, that a corporate debtor is not allowed to plead usury as a defense in any action.
