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 California, usury laws are codified under the California Constitution Article XV and the California Civil Code. These laws set the maximum interest rates that can be charged on a loan. For personal, family, or household purposes, the maximum interest rate is 10% per annum. For other types of loans, such as those for home improvement or goods or services other than personal, family, or household purposes, the limit is either 10% or 5% over the amount charged by the Federal Reserve Bank of San Francisco on advances to member banks, whichever is greater. Certain loans are exempt from California's usury laws, including those made by financial institutions such as banks, credit unions, finance lenders, and pawnbrokers. Additionally, the usury laws do not apply to loans secured by real property. Interest is defined as compensation for the use or forbearance of money, and it typically includes service charges, finance charges, and discount points. However, contingent or uncertain charges are not considered interest under California's usury laws.