Apologies for the lack of content the past 30 days. Significant personal and business commitments have gotten in the way. I’m alive and well, however.
Sometimes I’m asked whether Indiana has commercial interest rate caps or, in other words, whether there are usury laws applicable to business loans. Black’s Law Dictionary defines “usury” as “the laws of a jurisdiction regulating the charging of interest rates” or “an unconscionable and exorbitant rate or amount of interest.”
Based on my experience and understanding of Indiana law, there are no statutory caps on interest rates for commercial loans. This is not to suggest that, for instance, a default interest rate of some massive amount (say, 90% per annum) would ultimately be enforceable, if challenged in court. I’m only passing along that Indiana’s legislature is “hands off” when it comes to regulating interest charged on business loans.
(There are, however, so-called usury laws applicable to consumer loans, which are not the subject of today’s post.)
To my knowledge the only statute that could possibly fall into the category of a commercial rate cap is Indiana Code 24-4.6-1-101, sometimes called the “Post-Judgment Interest Statute,” which generally provides for a post-judgment interest rate of eight percent (8%) per annum. The rate runs from the date of the Court finding (judgment) until the date the defendant (borrower/guarantor) satisfies the judgment. Why could this be labeled a cap? Because 8% could be less than the rate called for in the underlying promissory note, especially if the note provided for default interest.
Prior Posts.
- What Is Indiana’s Post-Judgment Interest Rate?
- Indiana Supreme Court’s COVID Order Interpreted: Post-Judgment Interest
- Indiana’s Post-Judgment Interest Statute Applies to Awards of Attorney’s Fees
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Part of my practice involves representing parties in disputes arising out of loans in default. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@dinsmore.com. Also, don’t forget that you can follow me on X @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.