You are here: / / Interest Paid In Advance Should Not Be Deducted from the Face Amount of...

Interest Paid In Advance Should Not Be Deducted from the Face Amount of the Loan When Determining Interest Rate—Law of Usury Does Not Apply to Interest After the Maturity of the Note (Late Payments)

The Third Department explained the law of usury as it related to interest paid in advance and interest after maturity of the note (late charges):

The defense of usury requires clear and convincing evidence of a loan given with the intent to take interest in excess of the legal rate … . As relevant here, a loan is usurious if the annual interest rate exceeds 16% (see General Obligations Law § 5-501 [1]; Banking Law § 14-a [1]). Defendant bases his claim of usury on his advanced interest payment, claiming that the annual interest rate should be calculated by dividing the total annual interest, $18,750, by the total received at closing, $115,625, resulting in an annual interest rate of 16.2%. However, the Court of Appeals has held that “interest on the whole amount of principal agreed to be paid at maturity, not exceeding the legal rate, may be taken in advance” … . Thus, under the traditional method of computation as set forth in Band, the prepaid interest is not deducted from the face amount of the loan and defendant was charged a legal rate of 15% interest … . Defendant’s contention that the late charges incurred after the default should also be included in the calculation of interest is unavailing, because “[t]he defense of usury does not apply where the terms of a promissory note impose a rate of interest in excess of the statutory maximum only after maturity of the note” … . Martell v Drake, 2015 NY Slip Op 00685, 3rd Dept 1-29-15

 

You might also like
SKIN CARE SPECIALIST WORKING FOR A SKIN CARE COMPANY WITH A DISPLAY IN A BLOOMINGDALE’S STORE WAS AN EMPLOYEE OF THE SKIN CARE COMPANY AND WAS ENTITLED TO BENEFITS, LATE NOTICE EXCUSED, CLAIMANT FELL ON THE WAY TO THE RESTROOM (THIRD DEPT).
THE SUPERIOR COURT INFORMATION WAS JURISDICTIONALLY DEFECTIVE BECAUSE IT DID NOT INCLUDE AN OFFENSE CHARGED IN THE FELONY COMPLAINT OR A LESSER INCLUDED OFFENSE (THIRD DEPT).
Fabricated Checks Using Defendant’s Name and Signature Were Not “Forged Instruments”
Flight Crew Member Deemed an Employee of a Service Which Provides Flight Crews for Corporate Clients
Multiplicitous Indictment Counts Dismissed/Warrantless Search of Impounded Vehicle Upheld
QUESTION OF FACT WHETHER STACKED SCAFFOLDING, WHICH WAS ON THE SAME LEVEL AS PLAINTIFF, CONSTITUTED A “PHYSICALLY SIGNIFICANT ELEVATION DIFFERENTIAL,” SUMMARY JUDGMENT DISMISSING PLAINTIFF’S LABOR LAW 240(1) CAUSE OF ACTION SHOULD NOT HAVE BEEN GRANTED.
Proof of Inability to Control Sexual Behavior (Over and Above Proof of Antisocial Personality Disorder [ASPD]), Deemed Sufficient to Justify Confinement as a Dangerous Sex Offender
No Need to Be Affiliated with an Authorized Rescue Entity or Volunteer Agency to Qualify for Benefits from World Trade Center Volunteer Fund

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Revocation of Pistol Permit Upheld Despite Petitioner’s Acquittal on Related... Employer’s Claim for Reimbursement from the Special Disability Fund for...