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Kansas Interest Rate Laws

Kansas interest rate laws are contained in Chapter 16, Article 2, Section 201 et seq. of Kansas Statutes.  Section 16-201 prescribes the legal rate of interest in the state as ten percent (10%) per annum.  According to Section 16-207, the parties to any bond, promissory note, bill or other instruments for the payment or forbearance may demand interest for the amount of such bond, bill, and other instrument at the rate not exceeding fifteen percent (15%) per annum.  By virtue of Section 16-207 (e) any person who contracts for an interest greater than that lawfully prescribed rate, should forfeit all interest contracted in excess of the amount authorized.  In addition, such person may also forfeit a sum of money, by deducting the amount due for principal and lawful interest, equal to the amount of interest contracted in excess of the amount authorized by Section 16-207.  The excess amount can also be set up as a defense or counterclaim in any action to enforce the collection of such obligation of extra interest paid.  The borrower can also seek to recover reasonable attorney fees.

According to Section 16-204 any judgment entered on or after July 1, 1996, pursuant to the code of civil procedure, should bear an interest which should be four percent above the discount rate set by the Federal Reserve Bank as of July 1 preceding the date the judgment was rendered.

Under Section 16-205, any judgment rendered on a contract should also bear the same rate of interest mentioned in the contract.  In other words, when a rate of interest is agreed upon by both parties to a contract, the same rate will continue to prevail until the full payment is made.  Any judgment rendered on such contract, should bear the same rate of interest and this should be specifically mentioned in the judgment.

Under Section 16-207 (f), the lawful rate of interest will not apply to persons who take loans for business and agricultural purposes.  Any loans taken primarily for personal, family or household purposes are treated as business and agricultural loans.

K.S.A. § 16-201

Legal rate of interest.
Creditors shall be allowed to receive interest at the rate of ten percent per annum, when no other rate of interest is agreed upon, for any money after it becomes due; for money lent or money due on settlement of account, from the day of liquidating the account and ascertaining the balance; for money received for the use of another and retained without the owner’s knowledge of the receipt; for money due and withheld by an unreasonable and vexatious delay of payment or settlement of accounts; for all other money due and to become due for the forbearance of payment whereof an express promise to pay interest has been made; and for money due from corporations and individuals to their daily or monthly employees, from and after the end of each month, unless paid within fifteen days thereafter.

K.S.A. § 16-207

Contract rate; penalties for prepayment of certain loans, recording fees; contracting for interest in excess of limitation, penalties, attorney fees; loans excluded.
(a) Subject to the following provision, the parties to any bond, bill, promissory note or other instrument of writing for the payment or forbearance of money may stipulate therein for interest receivable upon the amount of such bond, bill, note or other instrument of writing, at a rate not to exceed 15% per annum unless otherwise specifically authorized by law.
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K.S.A. § 16-204

Interest on judgments.
Except as otherwise provided in accordance with law, and including any judgment rendered on or after July 1, 1973, against the state or any agency or political subdivision of the state:
(a)  Any judgment rendered by a court of this state before July 1, 1980, shall bear interest as follows:
(1)  On and after the day on which the judgment is rendered and before July 1, 1980, at the rate of 8% per annum;
(2)  on and after July 1, 1980, and before July 1, 1982, at the rate of 12% per annum;
(3)  on and after July 1, 1982, and before July 1, 1986, at the rate of 15% per annum; and
(4)  on and after July 1, 1986, at the rate provided by subsection (e).
(b)  Any judgment rendered by a court of this state on or after July 1, 1980, and before July 1, 1982, shall bear interest as follows:
(1)  On and after the day on which the judgment is rendered and before July 1, 1982, at the rate of 12% per annum;
(2)  on and after July 1, 1982, and before July 1, 1986, at the rate of 15% per annum; and
(3)  on and after July 1, 1986, at the rate provided by subsection (e).
(c)  Any judgment rendered by a court of this state on or after July 1, 1982, and before July 1, 1986, shall bear interest as follows:
(1)  On and after the day on which the judgment is rendered and before July 1, 1986, at the rate of 15% per annum; and
(2)  on and after July 1, 1986, at the rate provided by subsection (e).
(d)  Any judgment rendered by a court of this state on or after July 1, 1986, shall bear interest on and after the day on which the judgment is rendered at the rate provided by subsection (e).
(e)  (1)  Except as otherwise provided in this subsection, on and after July 1, 1996, the rate of interest on judgments rendered by courts of this state pursuant to the code of civil procedure shall be at a rate per annum: (A) Which shall change effective July 1 of each year for both judgments rendered prior to such July 1 and judgments rendered during the twelve-month period beginning such July 1; and (B) which is equal to an amount that is four percentage points above the discount rate (the charge on loans to depository institutions by the New York federal reserve bank as reported in the money rates column of the Wall Street Journal) as of July 1 preceding the date the judgment was rendered. The secretary of state shall publish notice of the interest rate provided by this subsection (e) (1) not later than the second issue of the Kansas register published in July of each year.
(2)  On and after the effective date of this act, the rate of interest on judgments rendered by courts of this state pursuant to the code of civil procedure for limited actions shall be 12% per annum.
(3)  On and after July 1, 1996, it shall be presumed that applying interest at the rate of 10% per annum will result in the correct total of interest accrued on any judgments, regardless of when the judgments accrued, arising from a person’s duty to support another person. The burden of proving that a different amount is the correct total shall lie with any person contesting the presumed amount.

K.S.A. § 16-205

Interest rates or charges; contract rates continue until payment in full; judgments; excess rates and charges void.
(a) When a rate of interest or charges is specified in any contract, that rate shall continue until full payment is made, and any judgment rendered on any such contract shall bear the same rate of interest or charges mentioned in the contract, which rate shall be specified in the judgment; but in no case shall such rate or charges exceed the maximum rate or amount authorized by law, and any bond, note, bill, or other contract for the payment of money, which in effect provides that any interest or charges or any higher rate of interest or charges shall accrue as a penalty for any default, shall be void as to any such provision.
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K.S.A. § 16-207

(f)  The interest rates prescribed in subsections (a) and (b) of this section shall not apply to a business or agricultural loan. For the purpose of this section unless a loan is made primarily for personal, family or household purposes, the loan shall be considered a business or agricultural loan. For the purpose of this subsection, a business or agricultural loan shall include credit sales and notes secured by contracts for deed to real estate.
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Inside Kansas Interest Rate Laws