Legal Rate of Interest in Mississippi
In Mississippi, the phrase “legal rate of interest” means 8% per year. The phrase can be misleading, however, because it is legal to charge a higher rate.
The phrase “legal rate of interest” is simply the rate of interest a court awards on a debt if the contract in question did not specify a different rate.
The law allows you to agree to pay higher rates of interest in writing, depending on the nature of the transaction. Also, certain business entities can be charged a higher rate of interest than individuals.
Usury Laws – Legal Rate of Interest
Charging a rate of interest higher than the law allows is called usury. Mississippi has laws that were originally intended to protect borrowers from usurious transactions. The unfortunate fact, though, is that today these laws provide little protection to borrowers.
This is because the Mississippi Legislature decided to create a broad exception to the usury statute. It is now legal for any borrower to agree in writing to any rate of interest if the original principal balance to be repaid exceeds $2000.
So, as the saying goes, read the fine print carefully. It is possible for a borrower to end up paying more interest than the amount of money being borrowed.
If you have a Contract dispute over the legal rate of interest, call 601-202-1111 today.
571 Highway 51, Suite B. Ridgeland, MS 39157
Original content by: Attorney Craig Panter of Panter Law Firm