How do states calculate usury?

Does every state use the same method? Are usury rates the same in every state?

Answer
Usury is determined at a state level, so calculations can vary. Since the federal government is not involved, every state has the ability to set their own usury amount. A majority of states have usury rates around 10%, although exemptions, fine print, and other issues may effectively negate this rate.
The methods used to calculate usury will vary as well. Some states have a legal limit that is set, while others use a yearly or quarterly calculation. As usury is meant to reduce predatory lending practices, a set rate is to provide a guideline for lenders.
In most cases, lenders themselves will have their own method for calculating interest and the interests they charge. A large majority of lenders still use the 365/360 method for interest, which differentiates between the interest rate and the APR for a mortgage or a car loan.
If you’re in the market for a vehicle or you’re researching rates, you may as well check out Jerry for your car insurance needs. Just like you’d compare loan rates, Jerry lets you view car insurance rates from dozens of lenders.”
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Emily Maracle
Answered on Jul 30, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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