Code of Virginia

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Code of Virginia
Title 6.2. Financial Institutions and Services
Chapter 3. Interest and Usury
1/25/2022

Article 2. Legal, Judgment, and Contract Rates of Interest.

§ 6.2-301. Legal rate of interest; when legal rate implied.

A. The legal rate of interest shall be an annual rate of six percent.

B. Except as provided in subsection (b) of § 8.3A-112 and § 6.2-302, the legal rate of interest shall be implied when there is an obligation to pay interest and no express contract to pay interest at a specified rate.

C. The seller or provider of goods sold or services provided on an open account shall be entitled to, and may collect, interest at the legal rate upon the unpaid balance if (i) there exists no written agreement for closed-end credit under § 6.2-311 or open-end credit plan under § 6.2-312 and (ii) the purchaser or recipient of the goods or services fails to make payment in full within 60 days after mailing or presentation of a billing statement or invoice. Such interest shall begin to accrue on the day following such 60-day period.

1987, c. 622, § 6.1-330.53; 1991, c. 375, § 6.1-330.77:1; 2004, c. 646; 2010, c. 794.

§ 6.2-302. Judgment rate of interest.

A. The judgment rate of interest shall be an annual rate of six percent, except that a money judgment entered in an action arising from a contract shall carry interest at the rate lawfully charged on such contract, or at six percent annually, whichever is higher.

B. If the contract or other instrument does not fix an interest rate, the court shall apply the judgment rate of six percent to calculate prejudgment interest pursuant to § 8.01-382 and to calculate post-judgment interest.

C. The rate of interest for a judgment shall be the judgment rate of interest in effect at the time of entry of the judgment on any amounts for which judgment is entered and shall not be affected by any subsequent changes to the rate of interest stated in this section.

1987, cc. 622, 623, 630, § 6.1-330.54; 1991, c. 508; 2004, c. 646; 2005, c. 455; 2010, cc. 550, 794.

§ 6.2-303. Contracts for more than legal rate of interest.

A. Except as otherwise permitted by law, no contract shall be made for the payment of interest on a loan at a rate that exceeds 12 percent per year.

B. Laws that permit payment of interest at a rate that exceeds 12 percent per year are set out, without limitation, in:

1. Article 4 (§ 6.2-309 et seq.) of this chapter;

2. Chapter 15 (§ 6.2-1500 et seq.), relating to powers of consumer finance companies;

3. Chapter 18 (§ 6.2-1800 et seq.), relating to short-term loans;

4. Chapter 22 (§ 6.2-2200 et seq.), relating to interest chargeable by motor vehicle title lenders;

5. § 36-55.31, relating to loans by the Virginia Housing Development Authority;

6. § 38.2-1806, relating to interest chargeable by insurance agents;

7. Chapter 47 (§ 38.2-4700 et seq.) of Title 38.2, relating to interest chargeable by premium finance companies;

8. § 54.1-4008, relating to interest chargeable by pawnbrokers; and

9. § 58.1-3018, relating to interest and origination fees payable under third-party tax payment agreements.

C. In the case of any loan upon which a person is not permitted to plead usury, interest and other charges may be imposed and collected as agreed by the parties.

D. Any provision of this chapter that provides that a loan or extension of credit may be enforced as agreed in the contract of indebtedness, shall not be construed to preclude the charging or collecting of other loan fees and charges permitted by law, in addition to the stated interest rate. Such other loan fees and charges need not be included in the rate of interest stated in the contract of indebtedness.

E. The provisions of subsection A shall apply to any person who seeks to evade its application by any device, subterfuge, or pretense whatsoever, including:

1. The loan, forbearance, use, or sale of (i) credit, as guarantor, surety, endorser, comaker, or otherwise; (ii) money; (iii) goods; or (iv) things in action;

2. The use of collateral or related sales or purchases of goods or services, or agreements to sell or purchase, whether real or pretended; receiving or charging compensation for goods or services, whether or not sold, delivered, or provided; and

3. The real or pretended negotiation, arrangement, or procurement of a loan through any use or activity of a third person, whether real or fictitious.

F. Any contract made in violation of this section is void and no person shall have the right to collect, receive, or retain any principal, interest, fees, or other charges in connection with the contract.

1987, c. 622, § 6.1-330.55; 1997, c. 180; 2002, c. 897; 2010, cc. 477, 794; 2020, cc. 1215, 1258.