N.J. Stat. Ann. § 31:1-1

Section 31:1-1 supplies the legal interest rate used to measure damages for withheld money, rather than a prevailing market rate capped at six percent.

Stein v. Delano · filed 1941-06-30

If the statute is presumed to be the legal interest rate, that presumption is conclusive.

Section 31:1-1 governs the regulated interest rate for first mortgages; the court found a 17% first mortgage violated the applicable 10½% limit.

Beneficial Finance Co. v. Wood (In re Stepanski) · filed 1982-05-18

There was not “full compliance” with the Secondary Mortgage Loan Act as required in 17:llA-58; with the provisions of 17:llA46f(l) and (2) requiring inquiry of or denial by prior mortgagees to obtain the funds as set forth above; and there was violation of N.J.S.A. 31:1-1, sequi, fixing the maximum interest rate at 10‘/2% for first mortgages set by regulation of the Commissioner of Banking.

Section 31:1-1(a) sets a sixteen percent civil usury ceiling for written contracts.

Greenpoint Law Committee, Etc. v. Davis · filed 2026-04-16(a)

Moreover, the sixteen percent interest rate was a rate allowed by New Jersey's usury laws, albeit the highest rate.

Section 31:1-1 sets the maximum interest rate for ordinary loans but does not govern interest on other claims or judgments.

Busik v. Levine · filed 1973-07-06

The Legislature has dealt with usury; that is, it has fixed the upper limit of the interest for which an ordinary loan may be made, see N.J.S.A. 31:1-1, but there is no statute dealing with interest upon other obligations or claims or with interest upon judgments.

Section 31:1-1 limits interest on loans to six percent absent a contrary contract provision, but does not set the interest rate for a refund of tax sale certificates.

Brinkley v. Western World, Inc. · filed 1995-01-31

Under New Jersey's usury statute, six percent remains the maximum interest rate allowable on loans of money, wares, merchandise, goods and chattels, in the absence of a contract provision to the contrary. N.J.S.A. 31:1-1. This case, of course, does not concern a loan of any kind. Thus, the rate of interest prescribed in N.J.S.A. 31:1-1 does not apply.

Section 31:1-1 does not treat a payment for waiver of a mortgage acceleration right as interest for a loan of money.

Shalit v. Investors Savings & Loan Ass'n · filed 1968-05-15

The principle of that decision appears to govern here inasmuch as in both cases the premium was paid by the mortgagor, not as interest "for loan of any money" ( N.J.S.A. 31:1-1), but to induce the surrender of a right enjoyed by the mortgagee. In the Bloomfield Savings case the mortgagee yielded its right to continue the investment of its funds. Here, the mortgagee relinquished its right to call in the full amount of the principal balance for reinvestment at more favorable rates of interest. Hence I conclude that the payment sought to be recovered is not usury.

Section 31:1-1 does not govern finance charges on bona fide installment sales.

Saul v. Midlantic Nat. Bank/South · filed 1990-04-10

Installment sales contracts, such as the one involved here, simply are not governed by the general usury statute.

Section 31:1-1(a) applies to loans or forbearances of money, not time-price differentials in sales transactions.

Perez v. Rent-A-Center, Inc. · filed 2005-02-04(a)

New Jersey courts have repeatedly held that the civil usury statute, N.J.S.A. 31:1-1, does not apply in the context of time-price differentials calculated with respect to sales transactions. The civil usury statute applies only in the context of loans or forbearances of money.

Section 31:1-1 does not apply to settlement agreements that are not loan instruments.

MARTELLO VS. ROBERT A. FRANCO, ESQ. (L-2704-11, MORRIS COUNTY AND STATEWIDE)(CONSOLIDATED) · filed 2017-11-14

Defendants misconstrue N.J.S.A. 31:1-1. This statute does not apply to the settlement agreements here because they were not loan instruments.

Section 31:1-1’s usury limit applies to interest charged on an individual guarantor’s own debt after the corporate debtor defaults.

Armin Corp. v. Kullman · filed 1974-04-05

The court holds that the obligation to pay interest, insofar as the obligation arises from the debt of the guarantor after it has come into existence upon the default of the corporate debt, is the kind of obligation to which N.J.S.A. 31:1-1 applies, and to which the corporate exception of N.J.S.A. 31:1-6 does not apply.

Section 31:1-1(b)(1), now (e)(1), exempts loans of $50,000 or more from its usury limits, subject to exceptions.

Stuchin v. Kasirer · filed 1990-01-11(b)(1)

Putting aside the question whether an interest increase after default constitutes the taking "directly or indirectly for loan of any money ... above the value of ... $9.50 for the forbearance of $100 for a year," as shall be prescribed in a regulation of the Commissioner of Banking N.J.S.A. 31:1-1(a) (prior to subsequent amendments), subsection (b)(1) of the Act enacted by L. 1973, c. 328, (now N.J.S.A. 31:1-1(e)(1)) provides an exemption for loans "in the amount of $50,000.00 or more," subject to exceptions not here pertinent. [3] Therefore assuming arguendo that the increase in interest rate after default qualifies for the application of usury prohibitions, this loan was exempted by the Act.

Section 31:1-1(e)(1) permits parties to a loan of $50,000 or more to agree on an interest rate above the ordinary statutory limit when the loan is not secured by a first lien on the specified residential property, subject to the criminal usury limit.

Presque Isle Apartments, L.P. v. Fidelity Union Bank/First National Bank (In Re Presque Isle Apartments, L.P.) · filed 1990-01-26(e)(1)

Since the Bank’s loan to the debtor was in excess of $50,000 and was not secured by a first lien on real property, the parties were free to contract for any agreed-upon interest rate up to the criminal usury rate.

Subsection (g) does not limit the interest rate on a loan of $50,000 or more when subsection (e) permits the parties to agree to any rate.

Charles Eric Kern · filed 2021-02-01(g)

But subsection (e) of N.J.S.A. 31:1-1 permits “any rate of interest which the parties agree upon” for loans in the amount of $50,000 or more (except for loans for first liens on real property where 1-6 dwelling units are or will be erected). N.J.S.A. 31:1-1(e). Mr. Kern’s loan was for $60,000. “Any rate” of course exceeds whatever rate it is that subsection (g) prescribes. Accordingly, the 83.03 percent rate of the Note does not violate subsection (g).

Section 31:1-1 does not apply to interest on defaulted obligations when the parties intended that default would not occur, but the exception does not apply when default was expected.

Loigman v. Keim · filed 1991-05-17(a)

It appears, and it is the ruling of this court, that the law of this State is consistent with the majority view that the usury statute N.J.S.A. 31:1-1, does not apply to interest on defaulted obligations. This exception, however, should be narrowly construed to apply only in situations where the true intent of the parties is for the default not to occur, and may not be applied in cases where a default is the expected occurrence.

A borrower can state a usury claim under § 31:1-1 based on a contract requiring usurious interest without proving that the interest was paid.

MACDONALD v. CASHCALL, INC. · filed 2019-10-31

As noted above, to state a claim for usury, a Plaintiff need not demonstrate that they actually paid usurious interest, only that they entered into a contract to do so.

A loan is usurious when the lender requires the borrower to assume another person's debt as an added price for the loan, unless separate consideration supports that undertaking.

Ferdon v. Zarriello Bros. Inc. · filed 1965-03-12

Notwithstanding that the debt assumed was not itself usurious, in the eyes of the law the exacted assumption of another's debt makes the loan to a new borrower usurious unless the exaction is supported by consideration other than the money newly loaned.

Section 31:1-1’s 16% interest limit does not apply to debts between corporations.

COLDWELL BANKER REAL ESTATE LLC v. THE BELLMARC GROUP LLC · filed 2021-09-09(e)

This limitation, provided by N.J.S.A. § 31:1-1(a), does not apply to debts between corporations.