Usury

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Statutes

"The general legal rate of interest on the principal balance of a loan in absence of a contract is 6%. Md. Code, Com. Law; §12-102.

However, parties to a written contract may contract for an interest rate not to exceed 8%. If such a loan is secured by the pledge of collateral which is a certificate of deposit held by the borrower, the lender may charge interest at a rate not to exceed 2 percent in excess of the rate of interest payable on the certificate of deposit.. If a loan is secured by the pledge of collateral which is other than a savings account or if such loan is unsecured, the lender may charge a rate of interest not in excess of 18 %, except, on a loan made on or after July 1, 1982, a lender may charge an effective rate of simple interest not in excess of 24 percent per year on the unpaid principal balance under specified conditions. Md. Code, Com. Law; §12-103.

Penalties include treble damages for amounts of interest and charges in excess of those allowed by statute. Md. Code, Com. Law; §12-114.

Late charges, service charges, prepayment charges, and certain fees are not included for usury. Md. Code, Com. Law; §12-105 "

Cases

Comments

Usury only applies to consumer loans in Maryland. A lender may charge interest at any rate if the loan is made to a corporation; a commercial loan is in excess of $15,000 and not secured by residential real property; or a commercial loan is in excess of $75,000 and secured by residential real property. Md. Code, Com. Law § 12-103.

Contributors

Steven N. Leitess
Leitess Friedberg PC

The statutory information was edited and reviewed with the support of MultiState

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