Maybe it’s the idea of having a little extra cash around for holiday gifts. Or maybe it’s the need to get out of a little financial bind. Either way, we’ve all be enticed by a credit card offer every now and then. And even if we swear we’ll be responsible with a new credit card, a high interest rate could get us into trouble in a hurry. Lucky for us, the Palmetto State has consumer protection statutes that limit interest rates on credit cards, judgments, and loans. Here is a brief overview of interest rates laws in Louisiana.
Interest Rates Laws
States have their own interest rate laws and can vary depending on where you live. No matter what the rate, though, the law is intended to help consumers by placing a cap on the amount of interest a creditor can charge. Depending on the type of credit or loan, the legal maximum in Louisiana is 12%. There are some exceptions for mortgage loans and borrowing for commercial or business purposes.
Interest Rates Laws in Louisiana
The basics of Louisiana's interest rate laws are listed below.
| Legal Maximum Rate of Interest | 12% maximum Louisiana Revised Statutes 9:3500, et seq.: Rates of Interest |
| Penalty for Usury (Unlawful Interest Rate) | Entire interest forfeited (9:3501) |
| Interest Rates on Judgments | Court judgments: 3.25 above Federal Reserve discount rate for that year Louisiana Revised Statutes 13:4202: Rates of Judicial Interest State agencies: 6% Louisiana Revised Statutes 13:5112: Suits Against the State |
| Exceptions | Secured by mortgage (9:3504); borrowing for commercial/business purposes (9:3509); obligation secured by a mortgage (9:3504) |
While it is certainly easier said than done, the surest way to avoid getting into financial trouble using credit card with a high interest rate is to avoid credit card debt before it even gets started. Often, your best strategy for avoiding debt is using your credit card responsibly and paying off your entire balance as soon as possible, preferably every month. None of us are perfect and if you should find yourself in significant credit card debt, you might still have some consumer protections under federal law.
Louisiana Interest Rate Laws: Related Resources
Many times an interest rate is buried deep the terms of service for credit cards agreements or loans and ascertaining exactly what the rate will be can be difficult. You can visit FindLaw’s section on Usury Laws and Limits on Credit Card Interest Rates for more resources and information on this topic. You can also contact a Louisiana consumer protection attorney if you would like legal assistance regarding a credit card or interest rate matter.
