Vermont Usury Laws
Vermont has developed a comprehensive system when it comes to lending practices and permissible interest rates in that state. Through this article, you will be provided with an overview of the applicable laws governing lending, interest rates, lending practices and usury in Vermont.
When considering personal loans in Vermont, the general usury limit for these types of unsecured, consumer loans is 12%. This is the maximum interest that can be charged on any personal, consumer loan in the State of Vermont. This is the maximum interest rate whether money is lent to the consumer by another individual or by a company of some sort. However, there are separate rules pertaining to legal interest rates that can be charged by state chartered banks, savings and loans, and credit unions.
Vermont has established a separate permissible interest scheme when it comes to retail installment contracts. When it comes to retail installment sales, the maximum interest rate for the first $500 under such an agreement is 18%. The maximum interest that can be charged under such an agreement above the $500 level is 15%.
The judgment rate of interest in Vermont has been established at 12% on all civil cases no matter what an underlying agreement may call for in regard to interest rates.
The statutes that have been enacted in Vermont that govern lending practices and interest rates in that state can be found codified at Vermont Statutes, Titles 09 and 09A.
If an agreement pertaining to a personal loan is determined to have an interest rate beyond what legally is permissible in Vermont, one of two things can then happen. First, the entire loan agreement may be voided based on a contention that it is illegal and unenforceable.
On the other hand, depending on the specific circumstances, the loan agreement may be modified. Through this modification, the interest rate will be lowered to a level that legally is acceptable and permissible. Otherwise, the loan agreement will remain unchanged and enforceable in a court of law.
Remember: Nothing in this article is intended to provide you with legal advice. This article is for informational purposes only. Further, bear in mind that lending laws in Vermont can and do change. We work to keep this information in this article up to date; however, we cannot guarantee that this information is always completely current.