If a lender charges an interest rate higher than allowed, this is known as what?

When a lender imposes an interest rate that exceeds the maximum rate allowed by law, it is referred to as usury. This practice is illegal in many jurisdictions, including North Carolina, as it exploits borrowers and can lead to significant financial hardship. Usury laws are designed to protect consumers by capping interest rates and ensuring fair lending practices.

The concept of usury not only helps maintain ethical standards within the lending industry but also contributes to a more stable financial environment. By preventing excessively high-interest rates, these laws aim to safeguard borrowers from predatory lending practices and promote responsible loan agreements.

Other terms like "overcharging," "foreclosure," and "illegitimate charge" may describe various issues related to lending or borrowing, but they do not specifically address the act of charging an illegal interest rate. Usury is a precise legal term that captures the essence of imposing rates that violate statutory limits.