Louisiana Loan Interest

The Louisiana Consumer Credit Law covers most financial transactions that involve consumer loans or credit sales. It does not cover mortgage loans, business loans, and credit sales of automobiles. The consumer credit law regulates how much interest can be charged and protects the consumer from unfair practices in the granting of credit and collection of debts.

The maximum allowable interest runs from 36% of the first $1,400 through a graduated scale to 21% of the portion of the loan that exceeds $7,000. Consumer loans are usually made by finance companies and are treated differently than consumer credit sales. Consumer credit sales are those in which a consumer purchase goods directly from the lender by using a charge account and credit card. The creditor has the choice of charging interest according to a graduated scale that is lower than the scale for consumer loans, or a flat charge of eighteen percent or less. Most retailers choose to charge the standard 18% on consumer credit sales or 1.5% per month on the average daily balance of a revolving charge account.