If I am being charged 158% interest of a $1500 loan, what can I do about it?
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If I am being charged 158% interest of a $1500 loan, what can I do about it?
Asked on August 14, 2011 Georgia
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Each state in this country has laws prohibiting excessive interest rates charged on loans as a matter of public policy. Such laws are called "usury laws" and are mostly set forth in the Constitutional Code of each state.
As a general rule, loans that are not transacted out of a real property transaction by a real estate broker normally have a maximum interest rate of prime plus five percent (5%) tied to certain indexes per statute.
The 158% interest rate on your loan of $1,500.00 appears usurious on its face and most likely the rate is not enforceable as a matter of public policy.
You might consider contacting your local bar association to see if sponsors clinics to assist people like you. In most states, if a loan is deemed usurious, the result is that the borrower pays back the amount borrowed but at no interest as a penalty to the person charging the illegal rate of interest.
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