Mississippi Usury Laws

Mississippi has enacted statutes to regulate usurious lending practices in that state. Generally, the statutes in the state that govern usury pertain to personal loan transaction in Mississippi.

The general usury limitation that is on the books in Mississippi today limits interest rates on personal loans to 10% or to no more than 5% above the Federal Reserve Rate, whichever is higher on the date that the personal loan agreement is entered into.

When it comes to commercial loans below $5,000, the usury caps that otherwise apply to personal loans are utilized. However, when it comes to commercial loans that are in excess of $5,000, there is no usury limitation whatsoever. It is important to understand that if it is determined that a personal loan has been shrouded in such a manner so as to appear to be a commercial loan transaction, the exchange will be deemed to be a sham transaction designed with the intent to avoid the appropriate application of the usury restrictions that otherwise would have applied in the absence of the masking of the true nature of the exchange or transaction.

The statutory provisions governing usury, lending practices and related issues in Mississippi can be found codified in the Mississippi Code at Title 85, generally.

The judgment rate on civil cases in Mississippi is set at 9% or at a rate that otherwise legally is permissible and that is set forth in the contract itself that is the subject of the litigation.

Generally speaking, a personal loan agreement that contains a rate of interest that exceeds the usury caps and limitations will be deemed illegal contracts. As a rule, illegal contracts are stricken and deemed void. In this process, the loan agreement in such a situation will be deemed an unenforceable contract. The rationale is that if one of the most significant provisions of the contract is illegal in its formulation, the entire agreement necessarily should be deemed void and unenforceable.

Keep in mind that the materials in this article are for informational purposes only. Nothing in this article should be construed as providing you with legal advice. If you do have questions, you should consult a lawyer. Additionally, we do take all steps to keep the information in this article current; however, the statutes governing usury, lending and related issues can be changed from time to time.

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