What is Debt Consolidation
Credit Card Debt Consolidation
Medical Debt Consolidation
7 Tips About Debt Consolidation
Common Debt Consolidation Mistakes
Debt Consolidation
Risks of Debt Consolidation, Types of Debt Consolidation Loans, Pros & Cons
Balance Transfer or Debt Consolidation?
Debt/Credit Calculators
 
Discussion Forum
 
Credit Counseling and You
Non-Profit Credit Counseling
 
Consequences of Credit Card Default
Effects of Credit Card Default
9 Common Credit Card Mistakes
Eliminate Credit Card Debt in 90 Days
Credit Card Debt
10 Expenses You Can Not Afford If You Have Credit Card Debt
Truth About Credit Card Companies
Should I Tear Apart My $300 Limit Credit Card - The Worst Credit Card Ever?
Disputing Credit Card Debt
401k vs Credit Cards: Where to invest?
 
Debt Settlement Letters
Sample Letters
Write a Powerful Debt Validation Letter
Reputable Debt Settlement Agreement
 
Debt Settlement vs. Debt Consolidation
Dangers of Debt Settlement
Avoid Debt Settlement Pitfalls
Debt Relief Tools/Debt Management Programs
Debt Settlement FAQs
Is Debt Settlement Money Taxable?
 
Reduce Medical Debt
Free Bill Consolidation: Does it exist?
Budgeting to Stay Debt Free
10 Debt Reduction Mistakes
Should I Pay Off my Debt or Save Up for a Down Payment on a House?
Bill Consolidation
Three Secrets to Lowering Your Debt
Tips To Lower Your Bills
 
Government Debt Help
Debt Help During Recession
Debt Relief During a Recession
What Debt Relief Means
 
Pay Off $50,000 Debt
Worried About Bills?
Money & Debt Videos
Report Illegal Collection Activity
Managing Medical Bills
Medical Debt & Bankruptcy
The Facts on Debt
Debt Quotations
Drowning In Debt?
Who to pay first?
Managing Debt FAQs
Medical Debt Solution
12 Hot Tips for Eliminating Debt
7 Debt Elimination Mistakes
2 Ways to Achieve Debt Elimination - Debt Snowball Elimination Method
 
Payday Loan Consolidation
Payday Loan Debt Consolidation
Payday Loan Relief
Default on a Payday Loan?
Payday Loans | Consumer Information
Problems with Payday Loan Stores
Bad Credit Loan Relief
How Payday Loans Work
 
What is Loan Consolidation?
How to get a $50,000 loan
Get an $80,000 Loan
$100,000 Loan for Debt Repayment
Veteran's Home Loan Refinance Options
Government Loans vs. Private Loans
Finding a Government Loan
Student Loan Consequences
 
Reputable Debt Consolidation Companies
Debt Consolidation Company Reviews
Reputable Debt Management Companies
List of Debt Companies in USA
Debt Companies By City
 
How Debt Affects Your Credit
What is shown on my credit report?
Improve Your Credit Score
Correct Credit Report Errors
Can Debt Settlement Ruin Credit?
Can Debt Negotiation Ruin Your Credit?
 
401k Limits
Safe CD Rates
Financial Planning
Banks versus Credit Unions
AMEX Horror Stories
IRS Tips For Audit
Choosing a Tax Preparer
American's not planning for long term care
Understanding Usury Laws
Unemployed During A Recession
FREE Government Grants
Where does money really come from?
 
About Us
Contact Us
6 Payday Loan Debts Owe
Borrow a Loan to Pay Off Payday Loan?
My husband was out of his job and Payday Loans were rolling over

Debt Consolidation Facts

1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair Isaac).

2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% - 30%!

3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.

Usury Laws Defined

Usury law is the law governing interest rates, specifically the maximum rate of charge allowed by law.  These laws are for any money borrowed privately, and are applied on a state to state basis. The federal government, while it has the authority to do so, currently does not mandate a federal usury law, but let’s the states decide this interest amount individually. 

The government did however in 1980 due to high inflation, allow national banks to ignore state usury laws.  Under usury law, anyone charging over their state’s interest limit for monies loaned would be in violation of the statute and subject to penalty and civil suit action.

Video: Usury Law Debate

Two Kinds of Usury Law Limits 

Usury is a complicated area of law.   When looking at your state’s usury law limit, you must take into consideration what type of loan you are dealing with.

usury laws

Usury law limits are divided into two (2) categories with separate interest ceilings: 

  • General:  The general limit affects transactions between a person or business lending to another person or business.  To lend above this rate, such as a payday loan store does, you need a special permit from the state.
  • Legal:  In certain states there are special exceptions where there is a legally binding contract for certain loans that state interest to be charged at the highest legal rate.  These loans are not typical however, and sometimes are referred to as “judgment” rates.  An actual judgment rate differs however, in that the interest rate is determined by the end of the contract.  This is usually only applied in certain investments.

usury laws

State by State 

usury lawsUsury law limits vary greatly from one state to another.  Some states simply do not have a usury limit.  Although it is true in these states interest can be significantly higher than in other states, there is a ceiling.  The federal government while not regulating rates has established certain “loan-sharking” statutes to prosecute and stop predatory lending practices.  Take a moment and learn your state's rate.

For example, in Alabama the general limit is a mere 8% while just north in Kentucky the limit is tied the federal interest rate and the limit can be as high as 19% by law. 

Why Are You Paying More? 

Most people are a little shocked when they see the law and ask why they are paying more than the legal limit in their state.  Many credit card companies and even banks are exempt from usury restrictions and free to charge higher interest rates. These lending institutions have applied and received special permission from the state to be in the lending industry and are not betrothed to usury law.

Video: Understanding What Happened to Credit Card Debt Usury Laws

Who Set’s the Limit and Why?

Each state governing body sets the limits for usury in their state.  For a change to be made in the amount or application of usury there must be a bill presented and be voted on.  Many companies have a large financial stake in what these usury laws dictate, for a simple reason.  These usury laws limit how much money they can make when lending money.  In an effort to have usury laws more “business friendly” many companies now lobby heavily in their state’s capitals to affect higher usury law limits.  The largest and most aggressive lobbyists are employed by the payday lenders.  These payday lenders loan money to people in financial distress at very high interest rates, and they make a lot of money.  While usually viewed as predatory lenders, these payday lenders stay right at the edge of the law, constantly pushing the envelope to maximize profits.  A single digit percent increase allowance in a given state’s usury law could mean potential millions in increased loan profits for a large payday lender.  It is no wonder they spend so much money in an effort to influence state usury law.