As a general rule, in part because of the liberality of the usury ceiling in the Commonwealth, courts in Massachusetts tend to be very restrictive in their interpretation of loan agreements that contain interest rates above the 20% mark. In the vast majority of instances, when a court in Massachusetts is faced with a situation in which in the interest rate on a personal loan agreement exceeds the 20% mark, the court will:
-- deem the loan agreement itself illegal
-- void the loan agreement
-- conclude that all provisions in that loan agreement (and not just the provision dealing with the interest rate) to be unenforceable.
In some rarer instances, depending on the facts at hand in a given situation, a court might reformat the loan agreement and thereby enforce the agreement with a lowered interest rate established by the court in conformity with the usury laws that are on the books in the Commonwealth.