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.
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This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified creditors rights lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local creditors rights attorney to discuss your specific legal situation.