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Are motor vehicle retail installment contacts subject to usury laws?

Buffalo, NY |

I live in NY state and the maximum allowed interest rate is 16% and I'm currently being charged 24.75% for a car loan.

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Attorney answers 1


Yes they are subject to NYS usury laws with certain exceptions. For example, if the lender is a federally chartered bank they would be subject to federal usury limits. In NY the usury rate is 16.99% for individuals and 24.99% for corporations. Anything over 25% is criminal usury. If the loan were made to a business the higher rate would be allowed. Check your loan documents to see where the lender is chartered, who the loan is made to (individual or a business) and whether it states that the laws of another state govern. If you still feel the rate is illegally high contact the attorney general and/or the NYS banking department.

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Thank you, your feed back was very helpful! The company that I financed my vehicle through is not a federally charted bank. It is a simple lending corporation which laws are governed by NY. Also, the loan was made out to myself and and a co-signer. I will take your advice and contact the AG. Thank you again for your professional advice.