What is the highest ANNUAL percentage rate that can be charged before it is considered USURY?

Question

i always thought it was 24.99% but i got an offer from a local loan agency today saying that i could borrow $500 at an annual percentage rate of 54.44% and the finance charge wuold be a little over $150 for a total of 651.30. i just laughed because i don't need 500 dollars that badly. but i thought 54.44 was very steep. isn't there a cap on finance charges (%)?

Answer 1

The usury laws have gone by the wayside for banks, but I guess if it's an individual or some other business, the rules apply.  I remember when it was 12% in the State of Washington, for everyone.  I would like to know why banks aren't subjected to the same legal system as everyone else.

Answer 2

Varies by each State Statue - and the specific statue the loan is being written under.

Answer 3

Caps vary by state. I would imagine there are a few states where rates aren't capped at all -- you know, free enterprise, no government interference, yadda yadda.

Sad to think there might be people who are so desperate (or ignorant) that they would accept a loan with such a rate.