Missouri Interest Rate Laws
The rate of interest in the State of Missouri is governed by Title 26, Chapter 408 of Missouri Statutes. The maximum lawful rate of interest on any written contract cannot be more than nine percent (9 %) per annum pursuant to Section 408.020. According to Section 408.030, parties may agree in writing to a rate of interest not exceeding ten percent (10 %) per annum, except when the market rate exceeds ten percent (10 %) per annum.
Pursuant to Section 408.030, the person paying a rate of interest greater than permitted by law can recover twice the amount of interest paid from the person who receives or charges such amount. Furthermore, any person who violates the rates of interest lawfully specified can be sued upon. As prescribed in Section 408.050, the borrower is entitled to recover the costs of suit, including a reasonable attorney fees determined by the Court along with the sum of money paid in excess of the principal and the legal rate of interest. Under Section 408.060, any person found guilty of exacting excess interest than lawfully allowed will have to incur all costs of the action against him/her, along with the excess interest credited upon the principal debt.
According to Section 408.040, judgments and orders for money upon contracts bearing more than nine percent interest will have the same interest prescribed in such contracts. As laid down under Section 408.035, it is lawful for parties to agree upon any rate of interest in connection with loans to corporations, general partnerships, limited partnerships, or limited liability companies; business loans of $5000 or more. Any rate of interest is also allowed to be agreed upon among parties for real estate loan, other than residential real estate loans, and loans of less than $ 5000 secured by real estate used for an agricultural activity. Loan of $ 5000 or more secured solely by certificates of stock, bonds, bills of exchange, certificates of deposit, warehouse receipts, or bills of lading pledged as collateral for the repayment of such loans are also exempted from the lawful rate of interest.
§ 408.020 R.S.Mo.
When no rate of interest is agreed upon, nine percent allowed as legal interest
Creditors shall be allowed to receive interest at the rate of nine percent per annum, when no other rate is agreed upon, for all moneys after they become due and payable, on written contracts, and on accounts after they become due and demand of payment is made; for money recovered for the use of another, and retained without the owner’s knowledge of the receipt, and for all other money due or to become due for the forbearance of payment whereof an express promise to pay interest has been made.
§ 408.030 R.S.Mo.
Interest, maximum rate allowed–penalty for overcharge, limitation on action for–”market rate” to be determined, when, how–discounting to financial organizations authorized
1. Parties may agree, in writing, to a rate of interest not exceeding ten percent per annum on money due or to become due upon any contract, including a contract for commitment; except that, when the “market rate” exceeds ten percent per annum, parties may agree, in writing, to a rate of interest not exceeding the “market rate”. A contract for commitment to lend money shall not exceed the maximum lawful rate in effect on the date of such contract. A loan entered into pursuant to a valid contract for commitment shall not exceed the maximum lawful rate in effect on the date of such commitment. The “market rate” for any calendar quarter shall be equal to the monthly index of long term United States government bond yields for the second preceding calendar month prior to the beginning of the calendar quarter plus an additional three percentage points rounded off to the nearest tenth of one percent. Calendar quarters begin on January first, April first, July first, and October first.
§ 408.035 R.S.Mo.
Unlimited interest, when allowed
Notwithstanding the provisions of any other law to the contrary, it is lawful for the parties to agree in writing to any rate of interest, fees, and other terms and conditions in connection with any:
(1) Loan to a corporation, general partnership, limited partnership or limited liability company;
(2) Business loan of five thousand dollars or more;
(3) Real estate loan, other than residential real estate loans and loans of less than five thousand dollars secured by real estate used for an agricultural activity; or
(4) Loan of five thousand dollars or more secured solely by certificates of stock, bonds, bills of exchange, certificates of deposit, warehouse receipts, or bills of lading pledged as collateral for the repayment of such loans.
§ 408.040 R.S.Mo.
Interest on judgments, how regulated — prejudgment interest allowed when, procedure
1. In all nontort actions, interest shall be allowed on all money due upon any judgment or order of any court from the date judgment is entered by the trial court until satisfaction be made by payment, accord or sale of property; all such judgments and orders for money upon contracts bearing more than nine percent interest shall bear the same interest borne by such contracts, and all other judgments and orders for money shall bear nine percent per annum until satisfaction made as aforesaid.
§ 408.050 R.S.Mo.
Excess interest paid recoverable with costs and attorney fee
No person shall directly or indirectly take, for the use or loan of money or other commodity, above the rates of interest specified in sections 408.020 to 408.040, for the forbearance or use of one hundred dollars, or the value thereof, for one year, and so after those rates for a greater or less sum, or for a longer or shorter time, or according to those rates or proportions, for the loan of any money or other commodity. Any person who shall violate the foregoing prohibition of this section shall be subject to be sued, for any and all sums of money paid in excess of the principal and legal rate of interest of any loan, by the borrower, or in case of borrower’s death, by the administrator or executor of his estate, and shall be adjudged to pay the costs of suit, including a reasonable attorney’s fee to be determined by the court.
§ 408.060 R.S.Mo.
Defendant may plead usury–judgment, how rendered–corporations cannot enter plea of usury
Usury may be pleaded as a defense in civil actions in the courts of this state, and upon proof that usurious interest has been paid, the same, in excess of the legal rate of interest, shall be deemed payment, shall be credited upon the principal debt, and all costs of the action shall be taxed against the party guilty of exacting usurious interest, who shall in no case recover judgment for more than the amount found due upon the principal debt, with legal interest, after deducting therefrom all payments of usurious interest made by the debtor, whether paid as commissions or brokerage, or as payment upon the principal, or as interest on said indebtedness; provided, however, that no corporation shall, after this section takes effect, interpose the defense of usury in any such action, nor shall any bond, note, debt, contract or obligation of any corporation or any security therefor, be set aside, impaired or adjudged invalid by reason of the rate of interest which the corporation may have paid or agreed to pay hereon.