What is usury?

Usury refers specifically to the illegal practice of lending money at excessively high rates of interest, which is considered exploitative and predatory. This concept is important because it protects consumers from being charged exorbitant fees that can lead to debt traps and financial ruin. Usury laws vary by jurisdiction but generally set maximum interest rates that lenders can charge, ensuring that borrowing remains fair and accessible.

Understanding usury is crucial in financial and legal contexts, as it highlights the balance between the lender's profit motives and the borrower’s financial well-being. It acts as a safeguard against the potential abuse of lending practices that could take advantage of vulnerable individuals in need of financial assistance. This concept does not apply to lawful lending practices, which abide by established regulations and interest rate limits.