What is the maximum interest rate you can charge in Florida?

In Florida, the maximum interest rate on most private loans is the equivalent of 18 percent per year in simple interest. For a loan over $500,000, the 18 percent limit falls away, and the ceiling becomes the 25 percent criminal usury rate in section 687.071, Florida Statutes. Both rules sit in Chapter 687.

What is the usury limit in Florida?

Section 687.03 makes it unlawful to charge a rate of interest "greater than the equivalent of 18 percent per annum simple interest" on a loan, advance of money, line of credit, or forbearance to collect a debt. Section 687.02 says the same thing from the contract side: any contract to pay interest above that rate is declared usurious.

The words "simple interest" matter for you as a lender. If your note compounds interest, you need to confirm that the yearly cost to the borrower stays at or below what 18 percent simple interest would produce. On a $10,000 loan held for one year, 18 percent simple interest is $1,800, so the total you collect for the use of that money over the year should not go past $1,800.

How does the $500,000 threshold change the limit?

Both sections contain the same exception. If a loan "exceeds $500,000 in amount or value," charging interest is not usury unless the rate exceeds the rate prescribed in section 687.071. That section is the criminal usury statute, and its first tier begins above 25 percent per year.

In plain terms, you have two ceilings. For a loan of $500,000 or less, the limit is 18 percent simple interest. For a loan above $500,000, the practical limit is 25 percent per year. The dollar figure is written into the statute itself, so you do not need to look up an adjusted number.

A loan of exactly $500,000 stays under the 18 percent rule, because the exception applies only when the amount exceeds $500,000. Above the threshold, the numbers still matter. A $600,000 loan at 20 percent is within the civil rules, while the same loan at 30 percent falls into the first criminal tier if the lender acts willfully and knowingly.

Does Florida's usury limit apply to loans between family members?

Yes. Chapter 687 does not set aside a separate rule for relatives or friends. Section 687.03 applies to "any person, or for any agent, officer, or other representative of any person" who charges more than the lawful rate, and the criminal tiers in section 687.071 apply to "any person making an extension of credit to any person."

That means a loan to your daughter, your business partner, or a neighbor follows the same 18 percent limit as any other loan of $500,000 or less. Most family loans carry rates far below that line, so the practical risk comes from fees, penalty interest, or a rate copied from a credit card agreement.

What counts as interest under Florida's usury law?

Florida looks past labels. Section 687.03 reaches interest charged "either directly or indirectly, by way of commission for advances, discounts, or exchange, or by any contract, contrivance, or device whatever" that requires the borrower to pay more than the principal actually received plus 18 percent simple interest.

That language matters when you take fees out of the loan up front. If you write a note for $10,000 but hand over only $9,500 after a $500 fee, the borrower received $9,500. Your rate check should start from the $9,500 the borrower actually got, with the $500 fee counted as part of the cost of the loan.

When does charging too much interest become a crime in Florida?

Section 687.071 sets criminal tiers. A person who willfully and knowingly charges, takes, or receives interest "at a rate exceeding 25 percent per annum but not in excess of 45 percent per annum" commits a misdemeanor of the second degree. Above 45 percent per year, the offense becomes a felony of the third degree.

A third tier covers extortionate extensions of credit, where both sides understand at the time of the loan that late payment or nonpayment could lead to violence or other criminal means. Knowingly making that kind of loan is a felony of the second degree. The rate tiers apply "Unless otherwise specifically allowed by law," so lenders licensed under other statutes can have different limits.

The same section adds a collection rule: "No extension of credit made in violation of any of the provisions of this section shall be an enforceable debt in the courts of this state." A court will not help you collect on a note priced at a criminal rate.

What penalties does a Florida lender face for civil usury?

Section 687.04 covers anyone who willfully violates section 687.03. The lender forfeits the entire interest charged or contracted for, and only the actual principal can be enforced in court. If the borrower has already paid the usurious interest, the lender must also forfeit to the borrower double the amount of interest taken.

Here is how that plays out. Say you lend $20,000 at 24 percent simple interest for one year, and the borrower pays you $4,800 in interest before challenging the note. The loan is under $500,000, so the 18 percent limit applies. If a court finds a willful violation, you lose the right to any interest, the statute calls for forfeiting double the $4,800, or $9,600, to the borrower, and you can still enforce repayment of the $20,000 principal.

The penalty section has exceptions. One protects a good faith buyer of negotiable paper purchased before maturity, unless the usury appears on the face of the note or the buyer had actual notice of it.

How do you set a safe rate on a Florida promissory note?

Write the rate as an annual simple interest figure, and keep it at or below 18 percent for any loan of $500,000 or less. If you use an installment promissory note, check that the payment schedule does not push the yearly cost above that figure.

Count every charge you take for the use of the money, including amounts deducted from the loan before the borrower receives it. Before you sign, run the numbers through our usury limit checker, and keep a copy of the signed note along with a record of every payment.

Sources

• Florida Statutes, Chapter 687 (Interest and Usury; Lending Practices)