What is usury?

Usury is a type of banking law in Texas which regulates the amount of interest that can be charged on loans. Usury laws set a maximum rate of interest that lenders are allowed to charge borrowers. This rate is generally lower than what a lender would typically charge on a loan. By setting a limit on the interest rate, usury laws are designed to protect consumers from charging excessive interest on loans. Usury laws also serve to protect lenders from charging too little for a loan, which could lead to a borrower defaulting on the loan. Usury laws vary from state to state. In Texas, the maximum legal interest rate is 10%. This means that if a consumer takes out a loan with an interest rate above 10%, the lender is legally prohibited from making that loan. The Texas Finance Code also applies to credit cards, requiring that lenders must set a maximum rate of interest on credit cards. Additionally, some transactions that are not considered loans, such as contracts between a seller and buyer, may be regulated by usury laws. Usury laws are important in ensuring that consumers are not exposed to excessive interest rates on loans and credit cards. Additionally, by controlling the interest rate that lenders can charge, usury laws can help to promote competition among lenders, ensuring that borrowers are able to get the best rate available.

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What is usury?

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