{"id":376632,"date":"2016-03-31T21:36:52","date_gmt":"2016-04-01T02:36:52","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/state\/texas-law\/texas-interest-rates-laws.html"},"modified":"2018-02-27T14:49:00","modified_gmt":"2018-02-27T19:49:00","slug":"texas-interest-rates-laws","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/texas-law\/texas-interest-rates-laws.html","title":{"rendered":"Texas Interest Rates Laws"},"content":{"rendered":"\n
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Texas Interest Rates Laws<\/h1>\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Most states have laws limiting the interest rates<\/a> a creditor may charge, anywhere from 5 to 15 percent, but consumers usually consent to higher rates by agreeing to the terms of the loan (thus waiving statutory interest rate limits). In Texas, interest rates are statutorily limited to 6 percent, or 18 percent for interest rates on judgments. Texas interest rate laws also provide an exception to these limits for business loans, commercial loans, investments, and open-end accounts.<\/p>\r\n

Limits on the amount of interest a creditor may charge are often referred as "usury<\/a>" laws. The term itself has been used since the Middle Ages and once had a negative association with any kind of interest-bearing loan. It has since been redefined as a term pertaining to excessive interest for loans. While Texas law specifically exempts certain types of loans from its interest rate limits (including business loans and open-ended accounts), it doesn’t apply to rates to which both parties agree.<\/p>\r\n

Refer to the table below to learn more about Texas interest rate laws. See FindLaw’s Financial Consumer Protection<\/a> section for related articles, including Usury Laws and Limits on Credit Card Interest Rates<\/a>.<\/p>\r\n\r\n
Legal Maximum Rate of Interest<\/td>\r\nWhen not specified, 6% (Finance \u00a7302.002<\/a>)<\/td>\r\n<\/tr>
Penalty for Usury (Unlawful Interest Rate)<\/td>\r\nThe greater of 3 times the amount computed subtracting the amount of interest allowed by law from the total amount of interest contracted for, charged, or received; or $2000 or 20% of the amount of principal, whichever is less (Finance \u00a7305.001<\/a> to 305.003); creditor who is liable is also liable for reasonable attorney’s fees (Finance \u00a7305.005); each offense is a misdemeanor with fine of up to $1000 (Finance \u00a7305.008)<\/td>\r\n<\/tr>
Interest Rates on Judgments<\/td>\r\nIf contract rate, then lesser of the contract rate or 18% (Finance \u00a7304.002)<\/td>\r\n<\/tr>
Exceptions<\/td>\r\nLoan for business, commercial, investment, or similar purpose; open-end accounts (Finance \u00a7303.305)<\/td>\r\n<\/tr><\/tbody><\/table>\r\n

Note:<\/i><\/b> State laws are constantly changing — contact a Texas consumer protection attorney or conduct your own legal research to verify the state law(s) you are researching.<\/i><\/p>\r\n

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