Alabama Usury Rate State Max - Car Loans

Not as easily as you'd think.

You truly are an idiot. This has nothing to do with taxes.

Ha ha. No worries.

Anyone out there? Is this thing on?

Oh, good Lord. Do a little research on your own, please. I did a half assed review of AL revised statues, section 8-8-1, and it looks like the rates are capped at 6%. I saw no references to exemptions for auto loans...but I didn't read every single word of section 8.

You can do that yourself, here: LINK

quote:

---

Legal Maximum Rate of Interest The legal maximum interest rate, if agreed upon in writing, is 8% per year, otherwise the maximum rate is 6% per year. Penalty for Usury (Unlawful Interest Rate) If the interest charged exceeds the amount legally permitted by Alabama law, it’s usurious. If so, the contract can’t be enforced, except to pay the principal originally loaned. The borrower can also deduct from the principal any interest already paid.

However, usury as a defense to paying a debt can’t be claimed on a “holder in due course” (a person who purchased the debt and was assigned the right to receive the debt payments) of any negotiable instrument (like a check or note). Interest Rates on Legal Judgments The interest rate for money judgments (other than costs) is typically 12%. If the judgment was based on a contract, then it’s at the rate of interest stated in the contract from the date of the cause of action, the breach of the contract. Judgments based on other actions, including fees allowed to a trustee, estate administrator, or attorney shall bear interest at 12% from the date of the entry of the judgment.

Past due child support is charged at 7.5% per year since September 1, 2011. Exceptions Although the general legal maximum interest rate is 6% annually, there are many exceptions. Most exemptions are for specific types of public or non-profit groups or for loans where federal law applies, including all of the following which are exempt from Alabama’s usury laws:

Loans Over $2,000 – If the original principal balance of a loan or credit card sale is more than $2,000, than the interest rate can be more than the maximum 8% stated above, if not unconscionably high.

LINK

---

tl/dr: If the loan for the car is over $2k, the interest rate is only usurious if it's "unconscionably high."

quote:

---

jturn17

---

Thank you, sir.