NC General Statutes

N.C. Gen. Stat. § 53-173 (2026)

Computation of interest; application of payments; limitation on interest after judgment; limitation on interest after maturity of the loan

✓ current as of July 2026

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(a), (a1) Repealed by Session Laws 2013-162, s. 3, effective July 1, 2013.

(b) Computation of Interest. - Interest on loans made pursuant to this section shall not be paid, deducted, or received in advance. The interest shall not be compounded but interest on loans shall (i) be computed and paid only as a percentage of the unpaid portion of the amount financed and (ii) computed on the basis of the number of days actually elapsed; however, if part or all of the consideration for a loan contract is the unpaid principal balance of a prior loan, then the amount financed under the loan contract may include any unpaid interest on the prior loan that has accrued within 90 days before the making of the new loan contract. For the purpose of computing interest, a day equals 1/365th of a year.

(b1) Application of Payments. - Any payment made on a loan shall be applied first to late charges and other permissible charges under this Article, then to any accrued interest, and then to principal. Any portion or all of the principal balance may be prepaid at any time without penalty.

(c) Limitation on Interest after Judgment. - If a money judgment is obtained against any party on any loan made under this section, neither the judgment nor the loan carries, from the date of the judgment, any interest in excess of eight percent (8%) per annum.

(d) Limitation of Interest after Maturity of Loan. - After the maturity date of any loan contract made under this section and until the loan contract is paid in full by cash, new loan, refinancing or otherwise, no charges other than interest at eight percent (8%) per annum shall be computed or collected from any party to the loan upon the unpaid principal balance of the loan.

(e) Repealed by Session Laws 1989, c. 17, s. 3.

(f) Repealed by Session Laws 2001-519, s. 3, effective January 1, 2002. (1961, c. 1053, s. 1; 1969, c. 1303, ss. 13, 17-22; 1973, c. 1042, s. 3; 1975, c. 110, s. 1; 1979, c. 33, s. 2; 1981, c. 561, ss. 1-3; 1983, c. 68, s. 1; c. 126, s. 13; 1989, c. 17, s. 3; 2001-519, s. 3; 2013-162, s. 3; 2023-61, s. 1.)

§ 53-173.1: Repealed by Session Laws 1989, c. 17, s. 4.

Notes of Decisions

Cited in 7 cases (3 in the last 5 years), 1970–2026 · leading case: Ken-Mar Fin. v. Harvey, 368 S.E.2d 646 (N.C. Ct. App. 1988).

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Ken-Mar Fin. v. Harvey, 368 S.E.2d 646 (N.C. Ct. App. 1988). “53-180(f) provided that real property was the only type of property which could not be used to secure a loan under G.S. 53-173 of the North Carolina Consumer Finance Act.”

BarclaysAmerican/Credit Co. v. Riddle, 292 S.E.2d 177 (N.C. Ct. App. 1982). · cites it 10× “G.S. 53-173 and -176.1 as each provision relates to the other and to the overall policies of the Consumer Finance Act.”

Herndon v. ITT Consum. Fin. Corp., 789 F. Supp. 720 (W.D.N.C. 1992). · cites it 2× “” Plaintiffs then assert that only the following charges are allowed: interest (N.C.Gen.Stat. §§ 53-173, 53-176), fees for returned checks (N.”

United States v. Wachovia Corp., 313 F. Supp. 632 (W.D.N.C. 1970). “Small loan operations are subject to state regulation, and enjoy the higher interest rates allowed by North Carolina General Statutes, § 53-173. Generally, speaking, their loans under $900 are allowed to be made at interest rates substantially higher than rates allowed to other…”

Wall v. AutoMoney (N.C. Ct. App. 2022). · cites it 3× “Violation of the NCCFA ¶ 26 The NCCFA makes unenforceable any “loan contract made outside this State in the amount or of the value of fifteen thousand dollars ($15,000) or less, for which greater consideration or charges than those authorized by N.C.G.S. § 53-173 and N.C.G.S. §…”

Ray v. TitleMax of Va., Inc. (N.C. Ct. App. 2026). “The Act states: No loan contract made outside this State in the amount or of the value of twenty-five thousand dollars ($25,000) or less, for which greater consideration or charges than are authorized by G.S. 53-173 and G.S. 53-176 have been charged, contracted for, or received,…”

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