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Warning
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LSDefine
Simple English definitions for legal terms
illegal interest
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A quick definition of illegal interest:
Illegal interest: When someone lends money and charges an extremely high rate of interest, it is called illegal interest or usury. This is against the law because it takes advantage of people who are in need of money and can't afford to pay back such high interest rates. It is important to be aware of the interest rates when borrowing money and to make sure they are legal and fair.
A more thorough explanation:
Illegal interest refers to the charging of an interest rate that is higher than what is allowed by law. This is also known as usury.
For example, if a lender charges a borrower an interest rate of 50% per year, when the legal limit is only 10%, this would be considered illegal interest.
Illegal interest is prohibited because it can lead to financial exploitation and can cause borrowers to fall into debt traps. It is important for borrowers to be aware of the legal interest rates and to avoid lenders who charge illegal interest.