USURY California law and max Interest charged.

[bashy]

What is the name of your state? CA

In looking on how much I'm allowed to charge for Interest under the law As a "Private Lender" without a brokers licence for a private loan for "home improvement" secured by Title It states!




[url]http://ag.ca.gov/consumers/general/usury.php[/url]


"In regard to usury, a loan to be used primarily for home improvement or home purchase is not regarded as a loan for personal, family or household purposes. With these loans and for any other loans which are not for personal, family or household purposes, the allowable rate is the higher of 10% or 5% over the amount charged by the Federal Reserve Bank of San Francisco on advances to member banks on the 25th day of the month before the loan (if the agreement to loan and the actual lending of the money are in different months, the 25th day of the month before the earlier event is used)."

My question is the "higher of 10% or 5% over" Is it stating its Either 10% or 5% over?
Right now the rates charged by Reserve Bank of San Francisco is 6.25% so can I charge 11.25% or 16.25% ?

[Paddy Reagan]

the allowable rate is the higher of 10% or 5% over the amount charged by the Federal Reserve Bank of San Francisco on advances to member banks on the 25th day of the month before the loan

The rate is either 10% OR the combined Reserve Bank rate (6.25%) plus 5% for a total of 11.25%. Since the bank rate + 5% is the higher of the two, that's the applicable legal rate.