Usurious Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Usurious, written in plain English, along with examples of how it is used.

What is Usurious?

(n) Usurious is the rate of interest charged on a debt, which exceeds the permissible upper interest ceiling as per rules prevailing that time. Courts may not interfere or order the payment of usurious interest.

History and Meaning of Usurious

Usurious interest is the interest that exceeds the legal rate allowed for a loan. The rate of usurious interest varies from country to country and from time to time. In the United States, for example, usury laws are set by each state, so they differ from place to place.

Usury has been considered a sin in Christianity, Judaism, and Islam. Historically, in different cultures, usury was condemned as unethical and often illegal. The Bible, for example, warned against usury as a form of oppression of the poor. In the Middle Ages, the Catholic Church prohibited Christians from lending money at interest. However, these religious restrictions did not prevent lending and borrowing at higher rates, and only in later periods were usury laws imposed by secular authorities.

Examples of Usurious

  1. A lender agrees to loan $100 to a borrower who will repay $150 in 30 days. The annual interest rate for this loan is 200%.

  2. A credit card company charges an interest rate of 25% per year. However, the state where the borrower resides sets a legal limit of 10%, making the interest charge usurious.

  3. A payday loan company charges a borrower $30 for a two-week loan of $200. The annual percentage rate (APR) on this loan is 391%, which is clearly usurious.

Legal Terms Similar to Usurious

  1. Predatory lending: a practice where a lender imposes unfair, deceptive, or abusive terms on a borrower, often charging excessive fees or interest rates.

  2. Interest rate caps: legal limits on the amount of interest that can be charged on loans.

  3. Loan sharking: a practice of offering loans at usurious rates, often to high-risk borrowers who cannot obtain credit elsewhere.