California Interest Rates Laws
More Information on Interest Rate Laws
| Legal Maximum Rate of Interest | Loan/forbearance of any money, goods, or things in action, or accounts after demand-7% or contract rate (Const. XV §1) contract rate shall not exceed 12% (Civil Code §1916-1) |
| Penalty for Usury (Unlawful Interest Rate) | Contract or agreement for greater than 12% shall be null and void as to any agreement to pay interest (Civil Code §1916-2); debtor may recover treble amount paid; willful violation-guilty of loan-sharking, a felony and punishable by imprisonment in state prison for not more than 5 yrs. or county jail for not more than 1 yr. (Civil Code §1916-3) |
| Interest Rates on Judgments | Set by legislature at not over 10% rate; in absence of setting of such rate, rate of interest is 7% (Const. Art. XV §1) |
| Exceptions | Incorporated insurer (Ins. §1100.1); licensed broker-deals (Corp. §25211.5); indebtedness issued pursuant to corporate securities law (Corp. §25116); licensed business and industrial development corporation (Fin. §31410); state and national banks acting as trustees (Fin. §1504); foreign banks (Fin. §1716); bank holding companies (Fin. §3707); state and federal savings and loans (Fin. §7675) |
Note: State laws are constantly changing -- contact an attorney or conduct your own legal research to verify the state law(s) you are researching.
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