K.S.A. » Chapter 16
Kansas Statutes Annotated

K.S.A. § 16-207 (2026)

Contract rate; penalties for prepayment of certain loans, recording fees; contracting for interest in excess of limitation; transactions excluded

✓ current as of May 2026
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16-207. Contract rate; penalties for prepayment of certain loans, recording fees; contracting for interest in excess of limitation; transactions excluded. (a) Subject to the following provision, the parties to any bond, bill, promissory note or other instrument of writing for the payment or forbearance of money may stipulate therein for interest receivable upon the amount of such bond, bill, note or other instrument of writing, at a rate not to exceed 15% per annum unless otherwise specifically authorized by law.

(b) No penalty shall be assessed against any party for prepayment of any home loan evidenced by a note secured by a real estate mortgage where such prepayment is made more than six months after execution of such note.

(c) The lender may collect from the borrower:

(1) The actual fees paid a public official or agency of the state or federal government, for filing, recording or releasing any instrument relating to a loan subject to the provisions of this section; and

(2) reasonable expenses incurred by the lender in connection with the making, closing, disbursing, extending, readjusting or renewing of loans subject to the provisions of this section.

(d) Any person so contracting for a greater rate of interest than that authorized by this section shall forfeit all interest so contracted for in excess of the amount authorized under this section; and in addition thereto shall forfeit a sum of money, to be deducted from the amount due for principal and lawful interest, equal to the amount of interest contracted for in excess of the amount authorized by this section and such amounts may be set up as a defense or counterclaim in any action to enforce the collection of such obligation and the borrower shall also recover a reasonable attorney fee.

(e) Subsection (a) shall not apply to:

(1) A covered transaction subject to the usury provisions of the Kansas mortgage business act, K.S.A. 9-2201 et seq., and amendments thereto;

(2) a consumer credit transaction subject to the usury provisions of the uniform consumer credit code, K.S.A. 16a-1-101 et seq., and amendments thereto;

(3) loans made by a qualified plan, as defined by the internal revenue code, to an individual participant in such plan or to a member of the family of such individual participant;

(4) a note secured by a real estate mortgage or a contract for deed to real estate when the note or contract for deed permits adjustment of the interest rate, the term of the loan or the amortization schedule; or

(5) a business or agricultural transaction. For the purpose of this section, a "business or agricultural transaction" means a loan, including a note secured by a contract for deed to real estate or a credit sale, which is made primarily for purposes other than personal, family or household purposes.

(f) Subsections (b), (c) and (d) shall not apply to:

(1) A covered transaction under the Kansas mortgage business act, K.S.A. 9-2201 et seq., and amendments thereto; or

(2) a consumer credit transaction under the uniform consumer credit code, K.S.A. 16a-1-101 et seq., and amendments thereto.

History: L. 1969, ch. 112, § 36; L. 1973, ch. 85, § 132; L. 1975, ch. 125, § 1; L. 1978, ch. 72, § 1; L. 1980, ch. 75, § 1; L. 1980, ch. 76, § 2; L. 1981, ch. 88, § 1; L. 1982, ch. 89, § 1; L. 1983, ch. 74, § 1; L. 1999, ch. 107, § 5; L. 2013, ch. 103, § 1; L. 2024, ch. 6, § 26; January 1, 2025.

Notes of Decisions
Cited in 19 cases (3 in the last 5 years), 1981–2022 · leading case: George v. Capital South Mortg. Investments, Inc., 961 P.2d 32 (Kan. 1998).
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George v. Capital South Mortg. Investments, Inc., 961 P.2d 32 (Kan. 1998). · cites it 12× “However, an expert witness may be called for the limited purpose of testifying concerning the permissible interest rates charged under K.S.A. 16-207.” A pretrial questionnaire was filed by the plaintiffs on May 18, 1995.”
Metro. Life Ins. v. Strnad, 876 P.2d 1362 (Kan. 1994). · cites it 5× “” For support, Metropolitan points out that the legislature, in 1980, considered deleting subsection (c) of K.S.A. 16-207, which prohibits a penalty from being assessed due to prepayment of a home loan secured by a note and mortgage when prepayment is made more than six months…”
Brennan v. Kunzle, 154 P.3d 1094 (Kan. Ct. App. 2007). · cites it 4× “In addition, the Brennans contend that the trial court erred in determining that the interest rate on default should fluctuate monthly based on the statutory rate published by the Secretary of State under K.S.A. 2006 Supp. 16-207. We agree. We interpret the promissory note as…”
Beltz v. Dings, 6 P.3d 424 (Kan. Ct. App. 2000). · cites it 8× “Usury Dings claims that because there is no statute of limitations in K.S.A. 16-207 (Ensley 1988), this court is required to apply K.”
Schulte v. Franklin, 633 P.2d 1151 (Kan. Ct. App. 1981). · cites it 9× “At the time the transaction documents were executed, the statute prohibiting the assessment of usurious interest, K.S.A. 1977 Supp. 16-207, provided in part: “(a) The parties to any bond, bill, promissory note, or other instrument of writing for the payment or forbearance of…”
Frets v. Capitol Fed. Sav. & Loan Ass'n, 712 P.2d 1270 (Kan. 1986). · cites it 4× “Appellant next alleges the trial court erred in ruling Capitol Federal did not breach the terms of the mortgage by agreeing to an increase in the interest rate in excess of the rate permitted by K.S.A. 1978 Supp. 16-207. Appellant makes several points under this issue, the first…”
Santa Rosa KM Assocs., Ltd., PC v. Principal Life Ins. Co., 206 P.3d 40 (Kan. Ct. App. 2009). · cites it 3× “The statute had been amended by the time of Frits’ contract to permit the cap on interest rates to float with the federal lending rate. The pre *856 vailing rate at the time of Frets’ contract was at or above 14.”
Pilcher v. Direct Equity Lending, 189 F. Supp. 2d 1198 (D. Kan. 2002). · cites it 2× “Section 16-207(b) by its express terms applies only to first mortgages, not (as here) second mortgages.”
Hamel v. Hamel, 299 P.3d 278 (Kan. 2013). “Contracts for deed are common in the acquisition of real estate in this state.”
Wight v. Agristor Leasing, 652 F. Supp. 1000 (D. Kan. 1987). · cites it 2× “at 5 (citing K.S.A. § 16-207(f)). The court noted that although this exemption did not exist at the time of the lease transaction, the general rule of law is that the repeal of a usury remedy operates retrospectively to validate a transaction which was usurous when executed.”
Indian Springs State Bank v. Kelley's Auto Supply, Inc., 675 P.2d 379 (Kan. Ct. App. 1984). · cites it 6× “” On the date when appellant signed the note, the Kansas usury statute provided for a ceiling on interest rates of “10% per annum *212 unless otherwise specifically authorized by law,” K.S.A. 1977 Supp. 16-207, and the published New York prime rate was 6 Va%.”
In re Odo (, 375 P.3d 320 (Kan. 2016). “See K.S.A. 16-207.] ‘38. Respondent advised and required [L.”
Show all 19 citing cases →
— K.S.A. § 16-207(1) — 1 case
Beltz v. Dings, 6 P.3d 424 (Kan. Ct. App. 2000). “Usury Dings claims that because there is no statute of limitations in K.S.A. 16-207 (Ensley 1988), this court is required to apply K.”
— K.S.A. § 16-207(a) — 1 case
Schulte v. Franklin, 633 P.2d 1151 (Kan. Ct. App. 1981). “At the time the transaction documents were executed, the statute prohibiting the assessment of usurious interest, K.S.A. 1977 Supp. 16-207, provided in part: “(a) The parties to any bond, bill, promissory note, or other instrument of writing for the payment or forbearance of…”
— K.S.A. § 16-207(b) — 10 cases
Beltz v. Dings, 6 P.3d 424 (Kan. Ct. App. 2000). “Usury Dings claims that because there is no statute of limitations in K.S.A. 16-207 (Ensley 1988), this court is required to apply K.”
Pilcher v. Direct Equity Lending, 189 F. Supp. 2d 1198 (D. Kan. 2002). “Section 16-207(b) by its express terms applies only to first mortgages, not (as here) second mortgages.”
Brennan v. Kunzle, 154 P.3d 1094 (Kan. Ct. App. 2007). “In addition, the Brennans contend that the trial court erred in determining that the interest rate on default should fluctuate monthly based on the statutory rate published by the Secretary of State under K.S.A. 2006 Supp. 16-207. We agree. We interpret the promissory note as…”
Hamel v. Hamel, 299 P.3d 278 (Kan. 2013). “Contracts for deed are common in the acquisition of real estate in this state.”
Schulte v. Franklin, 633 P.2d 1151 (Kan. Ct. App. 1981). “At the time the transaction documents were executed, the statute prohibiting the assessment of usurious interest, K.S.A. 1977 Supp. 16-207, provided in part: “(a) The parties to any bond, bill, promissory note, or other instrument of writing for the payment or forbearance of…”
— K.S.A. § 16-207(c) — 1 case
Metro. Life Ins. v. Strnad, 876 P.2d 1362 (Kan. 1994). “” For support, Metropolitan points out that the legislature, in 1980, considered deleting subsection (c) of K.S.A. 16-207, which prohibits a penalty from being assessed due to prepayment of a home loan secured by a note and mortgage when prepayment is made more than six months…”
— K.S.A. § 16-207(d) — 1 case
Schulte v. Franklin, 633 P.2d 1151 (Kan. Ct. App. 1981). “At the time the transaction documents were executed, the statute prohibiting the assessment of usurious interest, K.S.A. 1977 Supp. 16-207, provided in part: “(a) The parties to any bond, bill, promissory note, or other instrument of writing for the payment or forbearance of…”
— K.S.A. § 16-207(e) — 1 case
George v. Capital South Mortg. Investments, Inc., 961 P.2d 32 (Kan. 1998). “However, an expert witness may be called for the limited purpose of testifying concerning the permissible interest rates charged under K.S.A. 16-207.” A pretrial questionnaire was filed by the plaintiffs on May 18, 1995.”
— K.S.A. § 16-207(f) — 1 case
Wight v. Agristor Leasing, 652 F. Supp. 1000 (D. Kan. 1987). “at 5 (citing K.S.A. § 16-207(f)). The court noted that although this exemption did not exist at the time of the lease transaction, the general rule of law is that the repeal of a usury remedy operates retrospectively to validate a transaction which was usurous when executed.”
— K.S.A. § 16-207(h) — 2 cases
Brennan v. Kunzle, 154 P.3d 1094 (Kan. Ct. App. 2007). “In addition, the Brennans contend that the trial court erred in determining that the interest rate on default should fluctuate monthly based on the statutory rate published by the Secretary of State under K.S.A. 2006 Supp. 16-207. We agree. We interpret the promissory note as…”
Beltz v. Dings, 6 P.3d 424 (Kan. Ct. App. 2000). “Usury Dings claims that because there is no statute of limitations in K.S.A. 16-207 (Ensley 1988), this court is required to apply K.”
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