Connecticut Usury Laws

The general usury rate that has been established for personal or consumer loans in the State of Connecticut is 12%. Interest is not permitted to be charged in all civil suits. However, in this cases in which it is permissible, post judgment interest is allowed at the rate of 10%.

Connecticut courts follow what is a generally accepted practice across the United States when it comes to cases involving personal loans with interest rates in excess of what is permitted by law. In such instances, a court of competent jurisdiction in Connecticut will strike down a loan agreement that calls for interest to be paid in excess of the law as being unenforceable and illegal. The net effect of such an action by a Connecticut court will be the relief of the borrower from any further obligation under the terms and conditions of the loan.

The statutes governing usury lending practices are codified in the Connecticut General Statutes as have been revised by the Connecticut General Assembly. Specifically, Article Three establishes the specific provisions governing appropriate lending and interest rate practices in Connecticut. Primarily, it is these provisions contained in Article Three that govern personal and non-commercial consumer lending practices in Connecticut.

There are other provisions of both Connecticut law and Federal law that govern other types of loans. For example, banks, savings and loan as well as credit unions are not subject to these particular provisions governing interest rates on personal loans per se. These types of financial institutions are obliged to follow other regulations in regard to lending practices that are beyond the scope of the actual usury laws that have been enacted in Connecticut.

There are some limited instances in which a court in Connecticut will make an equitable decision (as the facts of a specific case might warrant). In such a situation, a court will reform the loan agreement and bring the interest rate associated with the loan into compliance with what is permitted by the usury laws in the state. Once taking this course of action, the loan agreement itself will be enforced (subject to the refashioned rate of interest).

The materials presented to you in this article are for informational purposes only. These materials are not intended to construed as legal advise in any form. If you do have specific questions about usury laws in the State of Connecticut, you should make contact with a qualified attorney.

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