Usury

"Any person, company, or corporation who shall reserve, charge, or take for any loan or advance of money, or forbearance to enforce the collection of any sum of money, any rate of interest greater than 5 percent per month, either directly or indirectly, by way of commission for advances, discount, exchange, or the purchase of salary or wages; by notarial or other fees; or by any contract, contrivance, or device whatsoever shall be guilty of a misdemeanor. (Ga. Code Ann., § 7-4-18) Any person, company, or corporation violating the usury provisions shall forfeit the entire interest so charged or taken or contracted to be reserved, charged, or taken. No further penalty or forfeiture shall be occasioned, suffered, or allowed. (Ga. Code Ann., § 7-4-10)

The legal rate of interest shall be 7 percent per annum simple interest where the rate percent is not established by written contract. The parties may establish by written contract any rate of interest, expressed in simple interest terms where the principal amount involved is more than $3,000.00 but less than $250,000.00 or where the lender or creditor has committed to lend, advance, or forbear with respect to any loan, advance, or forbearance to enforce the collection of more than $3,000.00 but less than $250,000.00. (Ga. Code Ann., § 7-4-2)

All judgments in this state shall bear annual interest upon the principal amount recovered at a rate equal to the prime rate as published by the Board of Governors of the Federal Reserve System, as published in statistical release H. 15 or any publication that may supersede it, on the day the judgment is entered plus 3 percent. If the judgment is rendered on a written contract or obligation providing for interest at a specified rate, the judgment shall bear interest at the rate specified in the contract or obligation. (Ga. Code Ann., § 7-4-12)"

>Where a note unequivocally calls for payment of an unlawful interest, the interest rate is considered usurious and thereby violates O.C.G.A. § 7-4-10. Aikens v. Wagner, 231 Ga. App. 178, 498 S.E.2d 766 (1998);

To establish a claim for usury, a plaintiff must establish that there is “(1) a loan or forbearance of money, express or implied; (2) made with an understanding that the principal shall or may be returned; (3) that provides a profit greater than that authorized by law in exchange for such loan or forbearance; and (4) with an intent to violate the law. Mallard v. Forest Heights Water Works, Inc., 260 Ga. App. 750, 580 S.E.2d 602 (2003)

It's important to ensure the interest rates charged within any lease or finance agreement are within the statutory limits, or that the agreement contains some form of savings clause that provides if the interest set forth is above the legal limit, the interest amount enforced on the agreement will be reduced to the maximum amount allowed by law.