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 Pennsylvania, usury laws are designed to limit the amount of interest that can be charged on loans to protect borrowers from excessively high rates. The legal maximum interest rate that lenders can charge in Pennsylvania for personal loans is generally 6% per annum for loans not exceeding $50,000 with no written contract, and up to 24% on loans with a written contract. However, there are exceptions for certain institutions and types of loans; for example, banks, credit unions, and other licensed lenders may charge higher rates as permitted by federal law or other Pennsylvania statutes. The elements of a usury claim in Pennsylvania include: (1) the existence of a loan of money; (2) an absolute obligation on the part of the borrower to repay the principal amount; and (3) the lender charging an interest rate exceeding the legal limit. Interest is considered to be any compensation for the use or forbearance of money, but it does not include certain charges like time price differentials that are not classified as interest under the law. Service charges and finance charges are typically regarded as interest when considering usury laws, while contingent or uncertain charges may not be considered interest.