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Usury Laws in California

California's constitution sets a 7% legal rate and caps written loans for personal, family or household purposes at 10% a year.

Last checked . General information, not legal advice.

California at a glance

Maximum agreed rate
10% (personal, family or household loans)
Other loans may carry the higher of 10% or 5% plus the San Francisco Fed advance rate. Building and loan associations, industrial loan companies, credit unions and other listed lenders are exempt.
Legal rate (no rate agreed)
7%
7% is the constitutional rate. A contract with no stated rate bears 10% after breach (Civ. Code 3289).

Sources

Last checked

The rules in California

What is the maximum interest rate on a private loan in California?

Maximum agreed rate in California: 10% (personal, family or household loans). Other loans may carry the higher of 10% or 5% plus the San Francisco Fed advance rate. Building and loan associations, industrial loan companies, credit unions and other listed lenders are exempt.

What interest rate applies in California when no rate was agreed?

Legal rate (no rate agreed) in California: 7%. 7% is the constitutional rate. A contract with no stated rate bears 10% after breach (Civ. Code 3289).

Where do the California usury laws come from?

The rules above come from Cal. Const. art. XV, 1 and Cal. Civ. Code 3289. Each source is linked on this page. We last checked them in October 2026.

Good to know

Fees, bonuses, commissions and discounts count toward the limit under Article XV, Section 1.

What this means in practice

Put the interest rate in writing. Many usury statutes set one limit for written agreements and a different, often lower, rate when nothing was agreed in writing. A signed promissory note or loan agreement that states the rate, the payment schedule and what happens on late payment avoids most disputes.

Count every charge, not only the stated rate. Courts may treat fees, points, required extras or a discount taken from the amount lent as interest when deciding whether a loan is usurious. A loan with a modest rate and large fees can still cross the limit.

Check who the lender is and what the loan is for. Usury limits often do not apply, or apply differently, to banks, licensed consumer lenders, credit card issuers, larger loans and loans to businesses or corporations. A rule written for loans between individuals may not cover your situation, so read the statute and its exceptions.

General information, not legal advice. Laws change, and cities can add their own rules, so check the current statute before you rely on it.