Alaska Usury Laws

The Legislature of the State of Alaska has established the general usury limit on personal loans at a maximum rate which is no more than five percent above the Federal Reserve interest rate on the date that the personal loan in question was made.

The general provisions regarding lending practices in the State of Alaska have been set forth in Title Six of Alaska Statutes Annotated. In addition to setting forth the limitations of interest rates on personal loans as has been set forth previously in this article, the Title also enumerates the penalties that are available should a lender act in violation of the usury provisions of Alaska Statutes. In this regard, a lender who acts in violation of these provisions can be charged with a felony under the provisions of the applicable law. Additionally, companion regulations have been enacted in Alaska to implement fully the provisions of the statutory scheme governing usurious lending practices.

The usury law provisions in Alaska pertain only to personal loans. Certain types of financial institutions -- including federally chartered banks and savings and loan -- are subject to other statutory provisions when it comes to interest rates that are permitted to be charged.

Alaska, like other states in the Union, has established case law precedent in which a contract for a personal loan that includes an interest rate above and beyond the usurious rate established by statute in that state will not be enforced. In other words, if a person who defaults on such a loan cannot successfully be sued civilly in the courts of Alaska. Rather, a court will dismiss such a cause of action brought by a lender under the long established precedent that the courts of Alaska will not work to enforce an illegal contract. A personal loan agreement that calls for an interest rate above and beyond what is permitted by law is illegal and hence unenforceable in Alaska.

The statutes and regulations pertaining usury loan rates and lending practices in Alaska can change from time to time. Although we take every step possible to maintain current information, you need to bear in mind that the statutes and regulations pertaining to usury loan rates and lending practices in Alaska can change from time to time.

We are not providing you with legal advice through this article. If you have any questions or concerns regarding usury laws, you should contact a lawyer who will be able to address your questions and concerns.

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