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 New York, usury laws are codified under the New York General Obligations Law and the Banking Law. The legal interest rate for loans is capped at 16% per annum for civil usury. Any interest charged above this rate can be considered usurious unless the loan is exempt from the usury laws. Certain loans, such as those made to corporations over a certain amount, loans made by licensed lenders, and other specified exceptions, may carry higher interest rates. Criminal usury is defined as charging interest at a rate exceeding 25% per annum, which is a criminal offense under New York law. The elements of a usury claim in New York include the existence of a loan agreement, an absolute obligation to repay the principal amount, and the charging of an interest rate exceeding the legal limit. Charges that are considered interest for the purposes of usury include service charges, finance charges, and discount points, provided they are not exempted by law. However, contingent or uncertain charges are typically not regarded as interest under usury laws.