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From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
Subject: [none]
Date: Sun, 10 May 1998 17:07:36 -0400 (EDT)

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> From: WDStancil <WDStancil@aol.com>
> Subject: Re: Setting an interest rate for a private loan
> 
> >  [My mom] 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.
> 
> States usually set a maximum interest rate - which is why credit card
> companies move to states without usury laws. :) 
> 
> What do local banks charge for overdraft loans?  Overdraft loans are
> unsecured, and would seem to be a good guide as to what interest rate to
> charge.  My bank (NC) charges 16.9% on overdraft loans. 


> From: elaine steward <esslady@ix.netcom.com>
> Subject: Usurious Interest rate? (Digest #10)
> 
> > Date: Tue, 5 May 1998 13:27:23 -0700 (PDT)
> > From: Sandi Rollins <srollins@econ.Berkeley.EDU>
> > Subject: Setting an interest rate for a private loan
> > interest rate of 18% (for a private, unsecured personal note)
> > was usurious.
> 
> I question this input.  If 18% - 21% is not usurious for Visa et al, why
> would it be usurious for your parents.  I'll be interested in input from
> folks who actually KNOW the answer.


Different rules apply to entities that are in the business of lending money --
namely banks, finance companies, etc. 

Depending on the state, there may also be different limits based on the size
of the loan, and the nature of the loan (e.g. mortgages vs. personal loans). 

There are also different limits for civil vs criminal usury.

The original poster need to do some serious research and/or consult an
attorney that specialize in this area. 

Chen



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