South Carolina Usury Laws
South Carolina has one of the more complex statutory schemes when it comes usury and usurious interest rates. First of all, when it comes to non-consumer transactions in South Carolina, there is no general usury limitation.
On considering non-consumer transactions, the statutes refer to Federal criminal laws against loan sharking. This is not an all together clear reference inasmuch as Federal law prohibiting loan sharking generally is thought to deal with situations involving consumer loans, personal loans. Moreover, even in those instances when Federal law is found applicable to non-consumer transactions, it depends on reference to state usury laws in most instances -- which do not exist in South Carolina when it comes to non-consumer transactions. Hence, on some level, questions of loan sharking and related matters truly must be considered and analyzed on a case by case basis.
The South Carolina Consumer Protection Code sets forth the maximum rates for interest on consumer transactions. Through this Code, different types of are delineated with the applicable maximum interest rate. There are many different types of consumer transactions that are so set forth within the South Carolina Consumer Protection Code. In addition, the maximum permissible interest rates that are allowed on consumer loans pursuant to the Consumer Protection Code are subject to change on a nearly daily basis depending on what fiscal index these rates have been tied to. Therefore, it is a common practice for a person who is intended to loan money via some sort of consumer transaction to seek legal advice prior to making the loan in order to ensure that on the date the loan is made, said interest rate truly is in compliance with applicable South Carolina Law at that time.
Courts are restrictive in their interpretation of permissible interest rates, particularly in consumer transactions. Therefore, if a consumer loan agreement does not have a permissible interest rate on the date it was entered into, the contract will be deemed illegal, void and unenforceable.
Finally, while we make the best effort to keep the information in this article up to date, usury and related laws in South Carolina really are changing literally all of the time. Moreover, if you have any questions regarding interest rates and lending practices in South Carolina, you should consult with an attorney. This article is not intended to be used as a source of legal advice for you.