North Dakota Interest Rates Laws

Each state has limits on the amount of interest a lender may charge, usually with some exceptions, historically referred to as usury laws. North Dakota's consumer loan interest rate limit of six (6) percent doesn't apply to loans to corporations, agencies funded by state/federal government, to partnerships/limited partnerships, to a bona fide pawnbroking transaction, or if the amount of the loan is over $35,000.

The maximum rate which parties can agree upon a contract in writing is up to 5.5 percent higher than average rate of interest on United States treasury bills, but the maximum allowable interest rate must be at least seven percent seven (7) percent. And even though there's a statutory limit, it's not always enforceable because consumers may agree to higher rates when signing the contract or simply clicking 'I agree' on a Web browser.

Credit Card Debt

While it is certainly easier said than done, the surest way to avoid getting into financial trouble using credit card with a high interest rate is to avoid credit card debt before it even gets started. Often, your best strategy for avoiding debt is using your credit card responsibly and paying off your entire balance as soon as possible, preferably every month. If you should find yourself in significant credit card debt, you might still have some consumer protections under federal law.

The following table lists additional details about interest rate limits in North Dakota. See FindLaw's Debt Collection Laws and Personal Finance sections to learn more.

More Information on Interest Rate Laws

Legal Maximum Rate of Interest 6% (§47-14-05); if contract in writing, up to 5.5% higher than average interest on treasury bills, but maximum must be at least 7% (§47-14-09)
Penalty for Usury (Unlawful Interest Rate) Forfeit all interest and 25% of principal (§47-14-10); Class B misdemeanor (§47-14-11); if interest paid, twice amount paid may be recovered (§47-14-10)
Interest Rates on Judgments Contract rate, otherwise 12% (§28-20-34)
Exceptions Loans to corporations; agency funded by state/federal government; amount over $35,000; loans to partnerships/limited partnerships (§47-14-09)

Note: State laws are always subject to change at any time through the enactment of newly signed legislation and other means. While we strive to ensure the accuracy of these pages, you also may want to contact a North Dakota consumer protection attorney or conduct your own legal research to verify the state law(s) you are researching.

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