highest legal interest rate
Legal Rate Of Interest. DEFINITION of 'Legal Rate Of Interest'. The highest rate of interest that can be legally charged on any type of debt. The legal rate of interest applies to all types of debt, although this rate may differ from one type of debt to another. This limit is set to prevent lenders from charging excessive rates of interest to borrowers.
Sec. 302.001. CONTRACTING FOR, CHARGING, OR RECEIVING INTEREST OR TIME PRICE DIFFERENTIAL; USURIOUS INTEREST. (a) A creditor may contract for, charge, and receive from an obligor interest or time price differential. (b) The maximum rate or amount of interest is 10 percent a year except as otherwise provided by law. A greater rate of interest than 10 percent a year is usurious unless otherwise provided by law. All contracts for usurious interest are contrary to public policy and subject to the appropriate penalty prescribed by Chapter 305.