Rules relating to interest rates in the State of Nebraska are found in, Chapter 45, Article 1 of Nebraska Revised Statutes. Section 45-101.03.states that any agreement agreed between parties for loan or forbearance of money, goods or things can charge an interest rate not exceeding sixteen percent (16 %) per annum. Furthermore, under Section 45-102, interest upon the loan or forbearance of money, goods or things in action shall be six percent (6 %) per annum commencing from September 1, 1983.
Penalty for usury is prescribed under Section 45-105 of Nebraska Statutes. If any action on any contract arises with regard to a greater rate of interest charged than lawfully allowed, then the injured party can recover only the principal amount without interest. In Section 45-110, the injured party can recover the sum contracted for at the time the original contract was entered plus interest not exceeding the maximum legal contract rate and costs.
Rate of interest on any judgment or decree, rendered before July 20, 2002, for the payment of money will be fixed at a rate equal to one percentage points above the bond equivalent yield, as published by the Secretary of the Treasury of the United States. Rate of interest on any judgment or decree, rendered on and after July 20, 2002, for the payment of money will be fixed at a rate equal to two percentage points above the bond investment yield, as published by the Secretary of the Treasury of the United States.
Exemptions from the lawful limit of interest rate are dealt under Section 45-101.04 of Nebraska Statute. Such exceptions to the usury limits are:
- Any loan made by any licensee or permittee operating under a license or permit duly issued by the Department of Banking and Finance pursuant to the Credit Union Act.
- Any loans to corporation, partnership, limited liability Company, or trust.
- The guarantor or surety of any loan to a corporation, partnership, limited liability company, or trust.
- Loans made when the aggregate principal amount is more than $25,000 to any one financial institution, licensee, or permittee.
- Loans guaranteed by state or federal government on securities.
- Interest charges made on open credit accounts.
- Loans made by a state or federal savings and loan association.
- Loans made primarily for business or agricultural purposes.
- Interest charges made on any goods or services sold under an installment contract pursuant to the Nebraska Installment Sales Act.
R.R.S. Neb. § 45-101.03
General interest rate; maximum; variable rate authorized; conditions
(1) Except as provided in section 45-101.04, any rate of interest which may be agreed upon, not exceeding sixteen percent per annum on the unpaid principal balance, shall be valid upon any loan or forbearance of money, goods, or things in action and may be taken yearly, for any shorter period, or in advance, if so expressly agreed.
****
R.R.S. Neb. § 45-102
Interest; legal rate; exception
Interest upon the loan or forbearance of money, goods or things in action shall be at the rate of twelve percent per annum for the period commencing on March 19, 1980, through August 31, 1983, and at the rate of six percent per annum commencing on September 1, 1983, on the unpaid principal balance, unless a greater rate, not exceeding the rate of interest provided in section 45-101.03, be contracted for by the parties.
R.R.S. Neb. § 45-110
Usurious contracts; limit of recovery
All such contracts are hereby declared contrary to public policy and usurious, and in any action therefore the plaintiff shall recover only the same number of dollars in any lawful money of the United States as the number of dollars contracted for at the time the original contract was entered into, plus interest not exceeding the maximum legal contract rate and costs, and no more.
R.R.S. Neb. § 45-103
Interest; judgments; decrees; rate; exceptions
For decrees and judgments rendered before July 20, 2002, interest on decrees and judgments for the payment of money shall be fixed at a rate equal to one percentage point above the bond equivalent yield, as published by the Secretary of the Treasury of the United States, of the average accepted auction price for the last auction of fifty-two-week United States Treasury bills in effect on the date of entry of the judgment. For decrees and judgments rendered on and after July 20, 2002, interest on decrees and judgments for the payment of money shall be fixed at a rate equal to two percentage points above the bond investment yield, as published by the Secretary of the Treasury of the United States, of the average accepted auction price for the first auction of each annual quarter of the twenty-six-week United States Treasury bills in effect on the date of entry of the judgment. The State Court Administrator shall distribute notice of such rate and any changes to it to all Nebraska judges to be in effect two weeks after the date the auction price is published by the Secretary of the Treasury of the United States. This interest rate shall not apply to:
(1) An action in which the interest rate is specifically provided by law; or
(2) An action founded upon an oral or written contract in which the parties have agreed to a rate of interest other than that specified in this section.
R.R.S. Neb. § 45-101.04
General interest rate; maximum; when not applicable
The limitation on the rate of interest provided in section 45-101.03 shall not apply to:
(1) Other rates of interest authorized for loans made by any licensee or permittee operating under a license or permit duly issued by the Department of Banking and Finance pursuant to the Credit Union Act, the Nebraska Installment Loan Act, subsection (4) of section 8-319, or sections 8-815 to 8-829;
(2) Loans made to any corporation, partnership, limited liability company, or trust;
(3) The guarantor or surety of any loan to a corporation, partnership, limited liability company, or trust;
(4) Loans made when the aggregate principal amount of the indebtedness is twenty-five thousand dollars or more of the borrower to any one financial institution, licensee, or permittee;
(5) Loans insured, guaranteed, sponsored, or participated in, either in whole or part, by any agency, department, or program of the United States or state government;
(6) Loans or advances of money, repayable on demand, which are made solely upon securities, as defined in subdivision (15) of section 8-1101, pledged as collateral for such repayment and in which such loans or advances are used by the borrower only for the purchase of securities as so defined. It shall be lawful to contract for and receive any rate of interest on such transaction as the parties thereto may expressly agree.
****
