What is usury?

Usury is a term used to describe the practice of lending money and charging illegal or excessive interest rates. In the state of Virginia, usury laws are actively enforced and specify the maximum interest rate that can legally be charged. A loan or other transaction considered usurious can be considered void or unenforceable. Usury laws in Virginia cap the legal rate of interest at 12% for most consumer transactions. Exceptions to this rate are transactions involving promissory notes, credit cards, and other open-end credit plans. In those cases, the legal interest rate is limited to 6% in Virginia. Usury laws also have different time frames specified for which the interest rate applies. For example, Virginia law states that the 12% rate applies to loans that are by their nature to be paid in multiple installments over time. This rate does not apply to loans that are set to be paid all at once. In addition, Virginia usury laws place caps on the fees that lenders or other creditors can charge to borrowers. This is to protect consumers from predatory financial practices and to ensure that lenders do not charge excessive fees that are not related to the loan or transaction. Overall, usury laws aim to protect consumers from predatory practices, ensure fairness, and limit the legal interest rate and fees creditors can charge. It is important for borrowers to be aware of their rights and ensure that they are not subject to excessive fees or interest payments when entering into a financial agreement.

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What is usury?

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