NC General Statutes

N.C. Gen. Stat. § 24-14 (2026)

Limitations on charges and interest

✓ current as of July 2026

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(a) No person, copartnership, association, trust, corporation or other legal entity making loans under this Article may charge, take or receive, directly or indirectly, simple interest in excess of one and one-half percent (1 ½%) per month or an annual rate equivalent to the Federal Discount Rate plus five percent (5%), whichever is the greater, computed on the actual or average daily unpaid balance of the principal amount of the loan for the time actually outstanding. However, interest may not be compounded.

(b) In addition to the interest permitted in subsection (a), the lender may include in the loan his actual expenses which are paid to third parties in connection with the loan. Such expenses shall be limited to those for: title examination, title insurance, appraisals, surveys, and recording fees or releasing fees to trustees or public officials, and only such insurance charges as permitted in subsection (c).

(c) Evidence of hazard insurance may be required by the lender of the borrower. Credit life, credit accident and health, and credit unemployment insurance, or any of them, may be offered but not required; provided (i) that the borrower has indicated a desire to purchase such insurance by signing a statement to that effect, (ii) that the borrower is advised that he may acquire this insurance from any insurance carrier, (iii) that the borrower is aware that this insurance may be rescinded within 30 days after receipt of the policy or certificate, and (iv) that the borrower directs the lender to purchase the above insurance from the proceeds of his loan.

The rates for the herein described insurance shall not exceed the standard rates approved by the Commissioner of Insurance for such insurance. Proof of all insurance issued in connection with loans subject to this Article shall be furnished to the borrower within 10 days from the date of application therefor by said borrower.

(d) No application fee or other charge shall be allowed in the event the loan is not consummated.

(e) The borrower shall further have the right to anticipate payment of his debt in whole or in part at any time, without payment of interest penalty, or any other fee or charge for such prepayment.

(f) In addition to the interest permitted by subsection (a), the lender may include in the principal balance fees or discounts not exceeding two percent (2%) of the principal amount of the loan less the amount of any existing loan by that lender to be refinanced, modified or extended. The fees and discounts are fully earned when the loan is made and are not a prepayment penalty. (1971, c. 1229, s. 2; 1973, c. 1150; 1977, c. 698, ss. 1, 2; 1979, 2nd Sess., c. 1157, ss. 5, 6; 1981, c. 464, s. 4; 1985, c. 154, s. 4; 1993, c. 226, s. 13.)

§ 24-15: Repealed by Session Laws 1979, 2nd Session, c. 1157, s. 7.

Notes of Decisions

Cited in 3 cases, 1979–2006 · leading case: Shepard v. Ocwen Fed. Bank, FSB, 638 S.E.2d 197 (N.C. 2006).

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Shepard v. Ocwen Fed. Bank, FSB, 638 S.E.2d 197 (N.C. 2006). · cites it 36× “The statute of limitations for a claim under the usury statutes is two years.”

Clemmer v. Liberty Fin. Plan., Inc., 467 F. Supp. 272 (W.D.N.C. 1979). · cites it 3× “N.C.G.S. § 24-14(b). The “principal amount” under state law is inconsistent with its counterpart under federal law, the “amount financed.”

Ferguson v. Coffey, 637 S.E.2d 241 (N.C. Ct. App. 2006). · cites it 2× “") North Carolina appellate courts have not addressed the question of whether compound or simple interest should be used to calculate the payoff amount for a buyer exercising their right of redemption in the absence of any provision in the agreement.”

— N.C. Gen. Stat. § 24-14(b) — 1 case

Clemmer v. Liberty Fin. Plan., Inc., 467 F. Supp. 272 (W.D.N.C. 1979). “N.C.G.S. § 24-14(b). The “principal amount” under state law is inconsistent with its counterpart under federal law, the “amount financed.”

— N.C. Gen. Stat. § 24-14(f) — 1 case

Shepard v. Ocwen Fed. Bank, FSB, 638 S.E.2d 197 (N.C. 2006). “The statute of limitations for a claim under the usury statutes is two years.”

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