Finance
Under Texas Finance Code, the maximum legal interest rate for most loans (unless pre-empted by federal law or contracted otherwise) is:
A8% per year
B18% per year for contracts that specify the rate (with lower limits for certain consumer loans)✓ Correct
C30% per year
DWhatever rate the parties agree to
Explanation
Texas Finance Code Chapter 302 provides usury limits—the maximum legal rate. Parties can contract for up to 18% annually in many circumstances. Certain consumer loans have lower limits. Usury violations can result in forfeiture of interest and other penalties. Federal preemption of state usury laws applies to many mortgage transactions.
Related Texas Finance Questions
- A Texas lender 'charges off' a non-performing loan. This means the lender has:
- A 'VA loan' for eligible Texas veterans has which of the following unique benefits compared to conventional loans?
- Texas's 'Homestead Preservation District' (HPD) program is designed to:
- Under the Homeowners Protection Act, conventional PMI must be automatically canceled by the lender when the principal balance reaches:
- In Texas, the 'Homeownership Across Texas' (HAT) program is a TDHCA initiative that provides:
- In Texas, 'construction-to-permanent' (C2P) financing combines which two loans into one process?
- In Texas, a 'purchase money mortgage' that a seller takes back as part of the sale price typically:
- A Texas real estate investor uses the debt coverage ratio (DCR) to evaluate a purchase. A DCR of 1.0 means:
Practice More Texas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Texas Quiz →