N.C. Gen. Stat. » Chapter 24

N.C. Gen. Stat. § 24-1.1

Contract rates and fees

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(a) Except as otherwise provided in this Chapter or other applicable law, the parties to a loan, purchase money loan, advance, commitment for a loan, or forbearance, other than a credit card, open-end, or similar loan, may contract in writing for the payment of interest not in excess of the following:

(1) Where the principal amount is twenty-five thousand dollars ($25,000) or less, the rate set under subsection (c) of this section.

(2) Any rate agreed upon by the parties where the principal amount is more than twenty-five thousand dollars ($25,000).

(b) As used in this section, interest shall not be deemed in excess of the rates provided where interest is computed monthly on the outstanding principal balance and is collected not more than 31 days in advance of its due date. Nothing in this section authorizes the charging of interest on committed funds prior to the disbursement of the funds.

(c) On the fifteenth day of each month, the Commissioner of Banks shall announce and publish the maximum rate of interest permitted by subdivision (1) of subsection (a) of this section on that date. The rate shall be the latest published noncompetitive rate for U.S. Treasury bills with a six-month maturity as of the fifteenth day of the month plus six percent (6%), rounded upward or downward, as the case may be, to the nearest one-half of one percent (1/2 of 1%) or sixteen percent (16%), whichever is greater. If there is no nearest one-half of one percent (1/2 of 1%), the Commissioner shall round downward to the lower one-half of one percent (1/2 of 1%). The rate so announced shall be the maximum rate permitted for the term of loans made under this section during the following calendar month when the parties to the loans have agreed that the rate of interest to be charged by the lender and paid by the borrower shall not vary or be adjusted during the term of the loan. The parties to a loan made under this section may agree to a rate of interest that shall vary or be adjusted during the term of the loan in which case the maximum rate of interest permitted on the loans during a month during the term of the loan shall be the greater of the rate announced by the Commissioner in (i) the preceding calendar month or (ii) the calendar month preceding that in which the rate is varied or adjusted.

(d) Any bank or savings institution organized under the law of North Carolina or of the United States may charge a party to a loan or extension of credit governed by this section a fee for the modification, renewal, extension, or amendment of any terms of the loan or extension of credit. The fee shall not exceed the greater of one-quarter of one percent (1/4 of 1%) of the balance outstanding at the time of the modification, renewal, extension, or amendment of terms, or fifty dollars ($50.00).

(e) Any bank or savings institution organized under the law of North Carolina or of the United States may charge a party to a loan or extension of credit not secured by real property governed by this section an origination fee as follows:

(1) For a loan or extension of credit with a principal amount of one hundred thousand dollars ($100,000) or greater, the maximum origination fee is one quarter of one percent (1/4 of 1%) of the principal amount.

(2) For a loan or extension of credit with a principal amount less than one hundred thousand dollars ($100,000), the origination fee shall not exceed the amounts in the following table:

Principal Amount Maximum Origination Fee

$0 to $1,499.99 $100.00

$1,500 to $19,999.99 $150.00

$20,000 to $29,999.99 $175.00

$30,000 to $49,999.99 $200.00

$50,000 to $99,999.99 $250.00

(3) If (i) the loan or extension of credit has a principal amount less than five thousand dollars ($5,000), (ii) the borrower is a natural person, and (iii) the debt is incurred primarily for personal, family, or household purposes, the loan or extension of credit shall not have an annual percentage rate that exceeds thirty-six percent (36%), inclusive of the origination fees permitted by this subsection and the interest permitted by subsection (c) of this section. For purposes of this subsection, "annual percentage rate" shall be calculated in accordance with the federal Consumer Credit Protection Act, Chapter 41 of Title 15 of the United States Code, (Truth in Lending Act) and the regulations adopted under it.

(f) This section does not limit fees on loans or extensions of credit in excess of three hundred thousand dollars ($300,000). (1969, c. 1303, s. 1; 1977, c. 778, ss. 1, 3; c. 779, s. 1; 1979, c. 138, s. 1; 1981, c. 465, s. 1; c. 934, s. 1; 1985, c. 663, s. 1; 1991, c. 506, s. 2; 1998-119, s. 1; 1999-75, s. 1; 2019-10, s. 1.)

 

Notes of Decisions
Cited in 93 cases (58 in the last 5 years), 1973–2026 · leading case: Odell v. Legal Bucks, LLC
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Odell v. Legal Bucks, LLC (2008) ncctapp · cites it 62× “This statute provides in part: (a) Except as otherwise provided in this Chapter or other applicable law, the parties to a loan, purchase money loan, advance, commitment for a loan or forbearance other than a credit card, open-end, or similar loan may contract in writing for the…”
Dash v. FIRSTPLUS HOME LOAN TRUST 1996-2 (2003) ncmd · cites it 4× “See N.C. Gen.Stat. §§ 24-1.1, 24-12, 24-14. 14 .”
State Ex Rel. Cooper v. NCCS Loans, Inc. (2005) ncctapp · cites it 4× “The maximum allowable rate of interest on consumer loans of $25,000 or less is set forth in N.C. Gen. Stat. § 24-1.1 (c). Under the Consumer Finance Act, a consumer lender may not charge interest “greater than permitted by Chapter 24” on loans of $10,000 or less without first…”
Dillon v. BMO Harris Bank, N.A. (2014) ncmd · cites it 4× “N.C. Gen.Stat. § 24-1.1(a), (c). . Gilbert v.”
Western Auto Supply Co. v. Vick (1981) nc · cites it 4× “Throughout the time of the transactions in question between the parties [1] , G.S. § 24-1.1 (Cum. Supp.1977), provided as follows: Except as otherwise provided in this chapter or other applicable law, the parties to a loan, purchase money loan, advance or forbearance may…”
James Dillon v. BMO Harris Bank, N.A. (2017) ca4 “Although North Carolina usury law generally prohibits interest rates in excess of 16%, N.C. Gen. Stat. § 24-1.1 , Great Plains has no physical presence in North Carolina and charged an interest rate of 440.”
Hatcher v. Rose (1991) nc · cites it 6× “§ 24-10 are loans made under N.C.G.S. § 24-1.1 which is entitled “Contract rates.”
Faircloth v. National Home Loan Corp. (2003) ncmd · cites it 2× “First, in her Complaint, Plaintiff alleges that Defendants violated sections 24-1.1, 24-10, 24-12, and 24-14 of the North Carolina General Statutes by charging her usurious fees in connection with the closing of her loan.”
Oteria Moses v. Cashcall, Inc. (2015) ca4 “In the first, she sought a declaratory judgment that CashCall’s loan was illegal and 12 unenforceable, in violation of N.C. Gen. Stat. § 24-1.1 (c) and § 53-166(a).”
Tetterton v. Ocwen Federal Bank (In Re Tetterton) (2007) nceb · cites it 6× “Third, Ocwen Federal did not engage in unfair trade practices or usurious behavior because Tetterton’s loan is not a “high-cost home loan” under N.C. Gen.Stat. § 24-1.1 E. Finally, Ocwen Federal is not liable under the North Carolina Usury Law and North Carolina Unfair Trade…”
Borg-Warner Acceptance Corp. v. Johnston (1992) ncctapp · cites it 4× “Thus, defendants contend, since the agreements were “security agreements,” N.C. Gen. Stat. § 24-1.1 (1991) applies. This statute, they allege, prohibits Borg-Warner from charging interest on funds not disbursed and in accelerating the balance of the loan due.”
West Raleigh Group v. Massachusetts Mutual Life Insurance (1992) nced · cites it 4× “Section 24-10(b) of the North Carolina General Statutes provides: (b) Any loan made under G.S. 24-1.1 in an original principal amount of one hundred thousand dollars ($100,000.”
Show all 93 citing cases →
— N.C. Gen. Stat. § 24-1.1(2) — 1 case
Equilease Corp. v. Belk Hotel Corp. (1979) ncctapp
— N.C. Gen. Stat. § 24-1.1(3) — 3 cases
Pappas v. NCNB National Bank of North Carolina (1987) ncmd
Haanebrink v. Meyer (1980) ncctapp
Ausband v. Wachovia Bank & Trust Co. (1973) ncctapp
— N.C. Gen. Stat. § 24-1.1(E) — 1 case
Raeford v. Equicredit Corp. of NC (2004) ncmd
— N.C. Gen. Stat. § 24-1.1(a) — 2 cases
Dillon v. BMO Harris Bank, N.A. (2014) ncmd “N.C. Gen.Stat. § 24-1.1(a), (c). . Gilbert v.”
State v. W. Sky Fin., LLC (2015) ncbizct
— N.C. Gen. Stat. § 24-1.1(a)(2) — 1 case
West Raleigh Group v. Massachusetts Mutual Life Insurance (1992) nced “Section 24-10(b) of the North Carolina General Statutes provides: (b) Any loan made under G.S. 24-1.1 in an original principal amount of one hundred thousand dollars ($100,000.”
— N.C. Gen. Stat. § 24-1.1(d) — 1 case
West Raleigh Group v. Massachusetts Mutual Life Insurance (1992) nced “Section 24-10(b) of the North Carolina General Statutes provides: (b) Any loan made under G.S. 24-1.1 in an original principal amount of one hundred thousand dollars ($100,000.”
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