Setting an interest rate for a private loan

From: Sandi Rollins <srollins@econ.Berkeley.EDU>
Subject: Setting an interest rate for a private loan
Date: Tue, 5 May 1998 13:27:23 -0700 (PDT)

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My mom has a question:

She and my step-dad make "hard money" loans as a way to
supplement their retirement income.  Recently, a lawyer told them
that the written agreement they had with one of their
less-than-stable borrowers was illegal, since the agreed-upon
interest rate of 18% (for a private, unsecured personal note)
was usurious.

However, he did NOT tell them what was considered a fair
and legal amount.

Any ideas where to find out?  This is in California.

Thanks in advance,

Sandi



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