Texas interest rate laws are stated in Texas Finance Code, Title 4 (Regulation of Interest Loans and Financed Transactions), Subtitle A (Interest).

Under Section 302.002, the state legal maximum interest rate is six percent per annum.  Under Section 304.002, interest rate on money judgment is 18 percent per annum.  If the judgment is based on a contract fixing another rate of interest, the interest will be equal to the lesser rate specified in the transaction.

Charging higher rate of interest than the permitted state legal maximum interest rate is usury.  Under Section 305.008, usury is a misdemeanor punishable with fine up to $1000.  Under Section 305.001, a lender charging usurious interest will be liable to pay the borrower greater of three times the amount computed subtracting the amount of interest allowed by law from the total amount of interest contracted for, charged, or received, or $2000 or 20 percent of the amount of principal, whichever is less.  Under Section 305.005, a lender who is liable for usury is also liable to pay reasonable attorney fees to the debtor.

Tex. Finance Code § 302.002 reads:

“§ 302.002.  Accrual of Interest When no Rate Specified
 If a creditor has not agreed with an obligor to charge the obligor any interest, the creditor may charge and receive from the obligor legal interest at the rate of six percent a year on the principal amount of the credit extended beginning on the 30th day after the date on which the amount is due. If an obligor has agreed to pay to a creditor any compensation that constitutes interest, the obligor is considered to have agreed on the rate produced by the amount of that interest, regardless of whether that rate is stated in the agreement.”

Tex. Finance Code § 304.002 reads:
 “§ 304.002.  Judgment Interest Rate: Interest Rate or Time Price Differential in Contract
 A money judgment of a court of this state on a contract that provides for interest or time price differential earns postjudgment interest at a rate equal to the lesser of:
    (1) the rate specified in the contract, which may be a variable rate;
   or 
   (2) 18 percent a year.”

Tex. Finance Code § 305.001 reads in part:

“§ 305.001.  Liability for Usurious Interest
 (a) A creditor who contracts for, charges, or receives interest that is greater than the amount authorized by this subtitle in connection with a transaction for personal, family, or household use is liable to the obligor for an amount that is equal to the greater of: 
   (1) three times the amount computed by subtracting the amount of
   interest allowed by law from the total amount of interest contracted
   for, charged, or received; or 
   (2) $ 2,000 or 20 percent of the amount of the principal, whichever is
   less.”

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