Yes, maximum interest rates exist through state and federal "usury laws," but they vary significantly, with many loopholes for large banks and credit cards, though federal protections cap rates for active-duty military at 36% APR, with some older debts at 6%. Most consumer loans are governed by state laws, leading to high rates in states with fewer caps (like South Dakota for credit cards), while some states have strong caps, especially for payday loans.
The maximum rate for consumer loans is capped at 12% per annum. Connecticut sets the legal interest rate at 8% and the general usury limit at 12%.
We'll kind of go a little bit more in depth on how that's calculated based on your interest rate and points on a few slides. But yeah, so big picture California says 10%, that's what you can charge on a loan and if you exceed 10%, you have a usury problem.
Yet Article 15 of the California Constitution declares that no more than 10% a year in interest can be charged for “any loan or forbearance of any money, goods or things in action, if the money, goods or things in action are for use primarily for personal, family or household purposes.”
Interest Rate Considerations
20% Is a Good APR For:
The average APR on a credit card is 22.35%. A 20% APR is decent for personal loans. It's far from the lowest rate you can get, though. Personal loan APRs tend to range from around 4% to 36%.
Yes, getting a 4% mortgage rate is difficult but possible in early 2026, often requiring strategies like assuming an existing low-rate loan (FHA/VA), using builder incentives (especially for new builds), buying discount points, securing a shorter-term loan (like 15-year), or having excellent credit/financials. While general 30-year rates are in the low 6% range, these methods can significantly lower your effective rate.
The Maximum Permissible Interest Rate (or MPIR) is a government-set interest rate that is used by residential aged care facilities to calculate a daily accommodation payment based on room price.
Usury is the practice of charging excessively high interest rates on loans, often exceeding legal limits set by jurisdiction. It typically exploits vulnerable borrowers, particularly those with poor credit or limited borrowing options, leading to significant financial strain.
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There is no federal law that sets maximum interest rates on all consumer loans; rather, rates are restricted at the state level. This means usury laws vary between states.
A 30% APR is not good for credit cards, mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay and what most lenders will even offer.
Unity Bank continues to offer 9.5% interest to senior citizens on a tenure of 1001 days. The customer can start the deposit with even ₹1,000. Monthly, quarterly, or cumulative payment of interest is available.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
Yes, a 29% APR is high for a credit card, as it is above the average APR for new credit card offers. Credit card APRs can be much lower, and some cards offer an introductory 0% APR for a certain number of months, which can save you a lot of money.
A 19.00% APR is a decent personal loan rate for people with good credit. Applicants with a credit score of 660+ could qualify for a personal loan with a 19.00% APR if they choose the right lender and have enough income to afford the loan.
After seven years of non-payment, the delinquent credit card debt typically disappears from your credit report, as dictated by the Fair Credit Reporting Act (FCRA). However, the debt itself is not erased. Debt collectors may still attempt to collect.
The federal government, along with each state, has its own usury laws, stating the maximum interest rate that can be charged on certain types of loans. If a creditor charges a rate higher than this, they would be breaking the law and held accountable for violation of the usury law.
The Udyogini Scheme offers a 50% subsidy on the loan amount for women entrepreneurs whose family income is below ₹2,00,000 per year.