Maximum Rates Of Interest Allowed On Private Loans In New York: New York Usury Law

Charging interest rates that exceed the state maximum allowed by law is called usury (also commonly referred to as “loansharking”), which is illegal.  When it comes to determining at what rate a particular interest charge becomes actionable on a civil basis (where a borrower can object to the terms of the loan), and at what rate the charge may actually expose the lender to criminal liability, New York Law can be a little complicated. Usury laws in New York, regulate the maximum interest rate a person or entity may be charged on a money loan.  The applicable laws are the General Obligations Law and the Banking Law, which set civil law limits, and the NY Penal Law, which sets criminal law limits.  Under these laws, if a private loan exceeds the maximum “civil” usury rate, then the entire loan is considered void, and the lender may be denied the right

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