Every state has very specific limits on the amount of interest that may be charged on consumer contracts, ranging anywhere from 5 to 15 percent. But because parties may always agree to interest rates that are above the legal limit, most consumer contracts include interest rates that are above that limit.

Thus few states have limits on what can be expressly agreed to in a contract. For example, Alaska limits express contract terms to 5 percent over the legal rate, while the District of Columbia has the highest stated ceiling, at 24 percent. A number of states allow the limit to be pegged to the rate set by the Federal Reserve Board; most of these states have limits of 5 percent above the Federal Reserve. Potentially, these may be much higher than the District of Columbia's 24 percent. Overall, it appears that the more rural the state, the lower the limits. Presumably, farmers are protected and are more secure with lower interest rates than citizens of generally urban states with larger economies.

Usury is an unconscionable and exorbitant rate or amount of interest which exceeds those permitted by law. There is a great variety of statutory remedies for usury. A few states class usury as a crime and prescribe prison for violations of its usury laws. The majority of states provide for economic remedies such as forfeiture of all interest paid, recovery of double the usurious amount, payment of a fine, or making the contract unenforceable. Some states even specify that banks or savings and loans pay penalties. North Dakota has one of the more extreme usury penalties: it requires payment of all interest plus 25 percent of the principal.

For the most part there are myriad exceptions to the legal interest rate, which may be tied to the character of the lender, borrower, loan amount, the nature of the contract, or the matter that is the subject of the contract. Effectively, legal interest rates are no more than general guidelines for all transactions rather than the specific limits placed on them. There are so many exceptions in many states that it is often necessary to find a different rate for every conceivable situation.