Kentucky Statutes 360.010 – Legal interest rate — Agreement for higher rate — Contract or obligation — Interest after default — Minimum charge for negotiated bank loan
Current as of: 2024 | Check for updates
|
Other versions
(1) Except as provided in KRS § 360.040, the legal rate of interest is eight percent (8%) per annum, but any party or parties may agree, in writing, for the payment of interest in excess of that rate as follows:
(a) At a per annum rate not to exceed four percent (4%) in excess of the discount rate on ninety (90) day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve District where the transaction is consummated or nineteen percent (19%), whichever is less, on money due or to become due upon any contract or other obligation in writing where the original principal amount is fifteen thousand dollars ($15,000) or less; and
(b) At any rate on money due or to become due upon any contract or other obligation in writing where the original principal amount is in excess of fifteen thousand dollars ($15,000).
(2) Any party or parties to a contract or obligation described in subsection (1) of this section, and any party or parties who may assume or guarantee the contract or obligation, shall be bound, subject to KRS § 371.190, for the rate of interest as is expressed in the contract, obligation, assumption, or guaranty, and no law of this state prescribing or limiting interest rates shall apply to the agreement or to any charges which pertain thereto or in connection therewith.
(3) The party entitled to be paid in any written contract or obligation specifying a rate of interest shall be entitled to recover interest after default at the rate of interest as is expressed in the contract or obligation prior to the default and that interest rate shall be the interest rate for the purpose of KRS § 360.040(3). If the interest rate expressed in the contract or obligation is a variable rate, the interest rate after default and until judgment shall be calculated and adjusted as provided in the contract or obligation prior to the default.
(4) The party entitled to be paid in any written contract or obligation not specifying a rate of interest or to which no interest rate otherwise applies shall be entitled to recover interest after default and until judgment at the legal rate of interest.
(5) Nothing in this section shall be construed to amend, repeal, or abrogate any other law of this state pertaining to any particular types of transactions for which the maximum rate of interest is specifically prescribed or provided.
(6) Any state or national bank may charge ten dollars ($10) for any loan negotiated at the bank in this state, even if the legal interest does not amount to that sum.
Effective: July 14, 2018
History: Amended 2018 Ky. Acts ch. 140, sec. 1, effective July 14, 2018. — Amended
2017 Ky. Acts ch. 17, sec. 3, effective June 29, 2017. — Amended 1980 Ky. Acts ch.
77, sec. 1, effective April 1, 1980. — Amended 1974 Ky. Acts ch. 321, sec. 1. — Amended 1972 Ky. Acts ch. 216, sec. 1. — Amended 1970 Ky. Acts ch. 67, sec. 2. — Amended 1966 Ky. Acts ch. 234, sec. 1. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 2218.
(a) At a per annum rate not to exceed four percent (4%) in excess of the discount rate on ninety (90) day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve District where the transaction is consummated or nineteen percent (19%), whichever is less, on money due or to become due upon any contract or other obligation in writing where the original principal amount is fifteen thousand dollars ($15,000) or less; and
Terms Used In Kentucky Statutes 360.010
- Contract: A legal written agreement that becomes binding when signed.
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
(b) At any rate on money due or to become due upon any contract or other obligation in writing where the original principal amount is in excess of fifteen thousand dollars ($15,000).
(2) Any party or parties to a contract or obligation described in subsection (1) of this section, and any party or parties who may assume or guarantee the contract or obligation, shall be bound, subject to KRS § 371.190, for the rate of interest as is expressed in the contract, obligation, assumption, or guaranty, and no law of this state prescribing or limiting interest rates shall apply to the agreement or to any charges which pertain thereto or in connection therewith.
(3) The party entitled to be paid in any written contract or obligation specifying a rate of interest shall be entitled to recover interest after default at the rate of interest as is expressed in the contract or obligation prior to the default and that interest rate shall be the interest rate for the purpose of KRS § 360.040(3). If the interest rate expressed in the contract or obligation is a variable rate, the interest rate after default and until judgment shall be calculated and adjusted as provided in the contract or obligation prior to the default.
(4) The party entitled to be paid in any written contract or obligation not specifying a rate of interest or to which no interest rate otherwise applies shall be entitled to recover interest after default and until judgment at the legal rate of interest.
(5) Nothing in this section shall be construed to amend, repeal, or abrogate any other law of this state pertaining to any particular types of transactions for which the maximum rate of interest is specifically prescribed or provided.
(6) Any state or national bank may charge ten dollars ($10) for any loan negotiated at the bank in this state, even if the legal interest does not amount to that sum.
Effective: July 14, 2018
History: Amended 2018 Ky. Acts ch. 140, sec. 1, effective July 14, 2018. — Amended
2017 Ky. Acts ch. 17, sec. 3, effective June 29, 2017. — Amended 1980 Ky. Acts ch.
77, sec. 1, effective April 1, 1980. — Amended 1974 Ky. Acts ch. 321, sec. 1. — Amended 1972 Ky. Acts ch. 216, sec. 1. — Amended 1970 Ky. Acts ch. 67, sec. 2. — Amended 1966 Ky. Acts ch. 234, sec. 1. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 2218.