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 Illinois, usury laws are codified under 815 ILCS 205/4 and other related statutes, which set the maximum interest rates that can be charged on loans. The legal rate of interest is 5% per annum for loans without an agreed-upon rate. For loans with an agreed-upon rate, the maximum rate is generally 9% per annum. However, there are numerous exceptions to these limits, particularly for financial institutions, which are often governed by different regulations allowing for higher rates. The elements of a usury claim in Illinois include (1) the existence of a loan of money, (2) an absolute obligation to repay the principal amount, and (3) the lender charging an interest rate exceeding the maximum allowed by law. Charges that are considered interest include service charges, finance charges, and discount points, provided they exceed the legal limits. However, certain charges that are contingent or uncertain may not be classified as interest under usury laws. It's important to note that some transactions are exempt from these limits, such as those involving credit cards, certain real estate transactions, and loans made by certain financial institutions. Violations of usury laws can result in penalties, including forfeiture of all interest and fines.