State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_53 > GS_53-173

§ 53‑173.  Maximum rateof interest and fee; computation of interest; limitation on interest afterjudgment; limitation on interest after maturity of the loan.

(a)        Maximum Rate ofInterest. – Every licensee under this section may make loans in installmentsnot exceeding three thousand dollars ($3,000) in amount, at interest rates notexceeding thirty‑six percent (36%) per annum on the outstanding principalbalance of any loan not in excess of six hundred dollars ($600.00) and fifteenpercent (15%) per annum on any remainder of such unpaid principal balance.Interest shall be contracted for and collected at the single simple interestrate applied to the outstanding balance that would earn the same amount ofinterest as the above rates for payment according to schedule.

(a1)      Maximum Fee. – Inaddition to the interest authorized in subsection (a) of this section, alicensee making loans under this section may collect from the borrower a feefor processing the loan equal to five percent (5%) of the loan amount not toexceed twenty‑five dollars ($25.00), provided that such charges may notbe assessed more than twice in any 12‑month period.

(b)        Computation ofInterest. – Interest on loans made pursuant to this section shall not be paid,deducted, or received in advance. Such interest shall not be compounded butinterest on loans shall (i) be computed and paid only as a percentage of theunpaid principal balance or portion thereof and (ii) computed on the basis ofthe number of days actually elapsed; provided, however, if part or all of theconsideration for a loan contract is the unpaid principal balance of a priorloan, then the principal amount payable under the loan contract may include anyunpaid interest on the prior loan which have accrued within 90 days before themaking of the new loan contract. For the purpose of computing interest, a dayshall equal 1/365th of a year. Any payment made on a loan shall be appliedfirst to any accrued interest and then to principal, and any portion or all ofthe principal balance may be prepaid at any time without penalty.

(c)        Limitation onInterest after Judgment. – If a money judgment is obtained against any party onany loan made under the provisions of this section neither the judgment nor theloan shall carry, from the date of the judgment, any interest in excess ofeight percent (8%) per annum.

(d)        Limitation ofInterest after Maturity of Loan. – After the maturity date of any loan contractmade under the provisions of this section and until the loan contract is paidin full by cash, new loan, refinancing or otherwise, no charges other thaninterest at eight percent (8%) per annum shall be computed or collected fromany party to the loan upon the unpaid principal balance of the loan.

(e)        Repealed by SessionLaws 1989, c. 17, s. 3.

(f)         Repealed bySession Laws 2001‑519, s. 3. (1961, c. 1053, s. 1; 1969, c. 1303, ss. 13, 17‑22;1973, c. 1042, s. 3; 1975, c. 110, s. 1; 1979, c. 33, s. 2; 1981, c. 561, ss. 1‑3;1983, c. 68, s. 1; c. 126, s. 13; 1989, c. 17, s. 3; 2001‑519, s. 3.)