All states have statutory limits on how much interest a creditor may charge a borrower for a loan, but they don't often apply. Some state laws exclude revolving credit (credit cards, etc.) from these limits, or credit above a certain limit, but national banks may charge the highest rate allowed in their home state, regardless of where the borrower lives (based on the High Court's Marquette National Bank v. First of Omaha Corp. ruling). Local banks, meanwhile, are allowed to "import" interest rate limits from states such as Delaware, where the limits are much higher.
Statutory Interest Rate Limits in Alaska: The Basics
When there is no contract, Alaska limits interest rates to 10.5 percent (or 5 percent more than legal rate for an express contract agreement). Any contract with a principal amount greater than $25,000 is exempt from these limits.
|Legal Maximum Rate of Interest||Absent contract: 10.5%; express contract agreement: 5% over legal rate (§45.45.010)|
|Penalty for Usury (Unlawful Interest Rate)||One paying usurious interest may recover double amount thereof within 2 years (§45.45.030)|
|Interest Rates on Judgments||3% above 12th Federal Reserve District's discount rate on January 2nd of year in which judgment is entered, unless contract action, then use contract rate (§09.30.070)|
|Exceptions||Contract where principal amount exceeds $25,000 (§45.45.010)(b)|
Note: State laws may change at any time through the decisions of higher courts, the enactment of newly signed legislation, or other means. While we strive to ensure the accuracy of these pages, you also may want to contact an Alaska consumer protection attorney or conduct your own legal research to verify the state law(s) you are researching.
What are Usury Laws and Where Do They Come From?
Laws that either limit or ban interest rates for lent money are traditionally referred to as usury laws. The term usury dates to the Middle Ages, when it applied to any kind of money lending that involved the accrual of interest. Any kind of interest was once frowned upon regardless of the actual rate, and thus called usury, but the term eventually was used only to describe excessive interest rates or deceptive lending practices.
Research the Law
Alaska Interest Rate Laws: Related Resources
Contact a qualified attorney.