Most states have usury laws (usually statutes) governing the amount of interest that can be charged on a loan. Usury laws vary from state to state, but the elements of a usury claim are generally: (1) a loan of money; (2) an absolute obligation to repay the principal; and (3) the exaction of a greater compensation than allowed by law for the use of the money by the borrower.

And interest means compensation for the use, forbearance, or detention of money. The term does not include time price differential, regardless of how it is denominated. The term does not include compensation or other amounts that are determined or stated by law not to constitute interest, or that are permitted to be contracted for, charged, or received in addition to interest in connection with an extension of credit.

Service charges, finance charges, and discount points are generally considered interest for purposes of usury. But contingent or uncertain charges are generally not considered interest.

In Arkansas, usury laws are codified under the Arkansas Constitution and state statutes, which set the maximum legal interest rates that can be charged on loans. The Arkansas Constitution, Amendment 89, limits interest rates to 17% per annum on consumer loans, credit sales, and contracts. This applies unless the Federal Reserve discount rate plus 5% would result in a rate lower than 17%, in which case the lower rate applies. For other types of loans, such as commercial loans, the legal rate of interest is 5% above the Federal Reserve discount rate unless parties agree otherwise, but it cannot exceed 17%. The elements of a usury claim in Arkansas include (1) a loan of money, (2) an absolute obligation to repay the principal, and (3) the charging of an interest rate exceeding the maximum allowed by law. Charges that are considered interest include service charges, finance charges, and discount points. However, contingent or uncertain charges are typically not regarded as interest. It's important for lenders to be aware of these limits to avoid usury claims and for borrowers to understand their rights under these regulations.