What is it called when a rate of interest exceeds the maximum rate allowable by law?

When a rate of interest exceeds the maximum rate allowable by law, it is referred to as usurious. Usury laws are designed to protect consumers from excessively high-interest rates that could be considered exploitative or predatory. Each state has its own regulations regarding the maximum interest rate that can be charged, and if a lender charges more than this limit, the loan may be considered usurious. This can have serious legal implications, including the possibility of the interest being deemed unenforceable in court or requiring the lender to forfeit interest payments altogether.

Understanding this concept is crucial for professionals in funeral service education, as it highlights the ethical and legal considerations related to financing options in funeral services. Proper adherence to these laws ensures fair treatment of consumers and maintains the integrity of the industry.