California Interest Rates 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.
Research the Law:
- Official State Codes - Links to the official online statutes (laws) in all 50 states and DC.
Related Resources for Interest Rates Laws: