North Dakota Usury Laws

North Dakota has established a comprehensive scheme to govern usury rates and limitations in this day and age. The general legal rate of interest in the state is 6% for many consumer transactions. With that in mind, the general usury rate limit in North Dakota for consumer or personal loans is 5 ½% above the six month Treasury Bill interest rate.

On personal loans, can have late fees, but the combined late fee charge likely will be computed along with the interest rate and the combination of the two cannot violate the usury cap. The state is monitoring late fees more closely to ensure that they are not being used as a means to avoid the usury law limitations and caps.

The judgment rate of interest on a case arising out of a contract is set at 12% or the rate that has been established within the contract, whichever rate is less.

Late charges are permitted on commercial accounts above and beyond the interest charge on the account. The late charge cannot be more than 1 ¾ of the past due balance on the account. However, in order for this late charge to legally acceptable, it must be disclosed and revealed prior to the time that the account in question is opened. Moreover, an account cannot be deemed past due until a net term or 30 days has elapsed.

If a personal loan agreement does not comply with the usury limitations discussed previously in this article, the agreement itself likely will be deemed an illegal contract. To this end, the agreement will be deemed unenforceable in its entirety. In such instances, illegal interest rates in a personal loan agreement will act as a perfect defense in an attempt by the lender to collect on the loan in a court of law.

Statutory provisions governing usury limitations and related matters in the State of North Dakota can be found codified in the North Dakota Century Code at Title 13. There are other statutory provisions governing other types of lending relationships to be found in the statutes as well.

Finally, keep in mind that the information contained in this article should not be construed as legal advice. If you have any questions regarding usury, please contact a lawyer. Also, while we make every effort to keep this article current, usury laws can be changed from time to time.

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