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Usury Laws in Michigan

In Michigan, the legal rate is 5%, parties may agree in writing to up to 7%, and knowingly charging more than 25% is criminal usury.

Last checked . General information, not legal advice.

Michigan at a glance

Maximum agreed rate
7%
Loans covered by other laws (such as licensed lenders) follow their own limits.
Legal rate (no rate agreed)
5%
Applies when the parties did not stipulate a rate in writing.
Criminal usury
Over 25% simple interest: up to 5 years and $10,000 fine
Applies to a person who knowingly charges the rate without legal authorization.

Sources

Last checked

The rules in Michigan

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

Maximum agreed rate in Michigan: 7%. Loans covered by other laws (such as licensed lenders) follow their own limits.

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

Legal rate (no rate agreed) in Michigan: 5%. Applies when the parties did not stipulate a rate in writing.

When is charging high interest a crime in Michigan?

Criminal usury in Michigan: Over 25% simple interest: up to 5 years and $10,000 fine. Applies to a person who knowingly charges the rate without legal authorization.

Where do the Michigan usury laws come from?

The rules above come from Mich. Comp. Laws 438.31 and Mich. Comp. Laws 438.41. Each source is linked on this page. We last checked them in October 2026.

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.

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