2020 Georgia Code
Title 7 - Banking and Finance
Chapter 4 - Interest and Usury
Article 1 - In General
§ 7-4-2. Legal Rate of Interest; Maximum Rate of Interest Generally; Certain Items Not Considered Interest

1. 1. 1. The legal rate of interest shall be 7 percent per annum simple interest where the rate percent is not established by written contract. Notwithstanding the provisions of other laws to the contrary, except Code Section 7-4-18, the parties may establish by written contract any rate of interest, expressed in simple interest terms as of the date of the evidence of the indebtedness, and charges and any manner of repayment, prepayment, or, subject to the provisions of paragraph (1) of subsection (b) of this Code section, acceleration, where the principal amount involved is more than $3,000.00 but less than $250,000.00 or where the lender or creditor has committed to lend, advance, or forbear with respect to any loan, advance, or forbearance to enforce the collection of more than $3,000.00 but less than $250,000.00.
      2. Where the principal amount is $250,000.00 or more, or the lender or creditor has committed to lend, advance, or forbear with respect to any loan, advance, or forbearance to enforce the collection of $250,000.00 or more, the parties may establish by written contract any rate of interest, expressed in simple interest terms or otherwise, and charges to be paid by the borrower or debtor.
      3. Nothing contained in this subsection shall be construed to prohibit the computation and collection of interest at a variable rate or on a negative amortization basis or on an equity participation basis or on an appreciation basis.
   2. Where the principal amount involved is $3,000.00 or less, such rate shall not exceed 16 percent per annum simple interest on any loan, advance, or forbearance to enforce the collection of any sum of money unless the loan, advance, or forbearance to enforce the collection of any sum of money is made pursuant to another law.
   3. As used in this Code section, the term "interest" means a charge for the use of money computed over the term of the contract at the rate stated in the contract or precomputed at a stated rate on the scheduled principal balance or computed in any other way or any other form. Principal includes such charges to which the parties may agree under paragraph (1) of this subsection. Amounts paid or contracted to be paid as either an origination fee or discount points, or both, on any loan secured by an interest in real estate shall not be considered interest and shall not be taken into consideration in the calculation of interest and shall not be subject to rebate as provided in paragraph (1) of subsection (b) of this Code section.
2. 1. Upon acceleration of the maturity of any loan, advance of money, or forbearance to enforce the collection of any sum of money upon which interest has been precomputed, unearned interest shall be rebated to the debtor in such amount as would result in the rate of interest earned being no greater than the rate of interest established by the original contract. In the case of a loan in which the principal and the interest for the entire term of the loan are included in the face amount of the loan and the loan is to be paid back in weekly, monthly, quarterly, semiannual, or yearly installments, with the interest and principal portions of each installment determined under the pro rata method, any such rebate shall be determined on the pro rata method.
   2. Unless stipulated in the contract, there shall be no prepayment penalty.
3. Nothing contained in this Code section shall be construed to amend or modify the provisions of Chapter 3 of this title, the "Georgia Installment Loan Act," Article 1 of Chapter 1 of Title 10, the "Retail Installment and Home Solicitation Sales Act," Chapter 5 of this title, "The Credit Card and Credit Card Bank Act," Chapter 22 of Title 33, the "Insurance Premium Finance Company Act," Part 5 of Article 3 of Chapter 12 of Title 44, relating to pawnbrokers, and, except as provided in Code Section 7-4-3, Article 2 of Chapter 1 of Title 10, the "Motor Vehicle Sales Finance Act."
4. Notwithstanding the foregoing, fees and other charges agreed upon by a financial institution and depositor, as defined in Code Section 7-1-4, in a written agreement governing a deposit, share, or other account, including, but not limited to, overdraft and nonsufficient funds, delinquency or default charges, returned payment charges, stop payment charges, or automated teller machine charges, shall not be considered interest.

(Laws 1822, Cobb's 1851 Digest, p. 393; Laws 1845, Cobb's 1851 Digest, p. 393; Code 1863, § 2022; Code 1868, § 2023; Ga. L. 1873, p. 52, §§ 2-4; Code 1873, § 2050; Ga. L. 1878-79, p. 184, § 3; Code 1882, §§ 2050, 2057a; Civil Code 1895, §§ 2876, 2886; Civil Code 1910, §§ 3426, 3436; Code 1933, § 57-101; Ga. L. 1975, p. 370, § 1; Ga. L. 1979, p. 355, § 1; Ga. L. 1983, p. 1146, § 1; Ga. L. 1984, p. 22, § 7; Ga. L. 1987, p. 268, § 2; Ga. L. 1988, p. 534, § 1; Ga. L. 1997, p. 143, § 7; Ga. L. 2014, p. 213, § 1/HB 824; Ga. L. 2020, p. 156, § 9/SB 462.)

The 2020 amendment, effective June 30, 2020, substituted "Georgia Installment Loan Act" for "Georgia Industrial Loan Act" in subsection (c).

- Credit Card and Credit Card Bank Act, § 7-5-1 et seq.

Georgia Industrial Loan Act, § 7-3-1 et seq.

Insurance Premium Finance Company Act, § 33-22-1 et seq.

Retail Installment and Home Solicitation Sales Act, § 10-1-1 et seq.

Illegal payday loans, § 16-17-1 et seq.

- Ga. L. 2014, p. 213, § 3/HB 824, not codified by the General Assembly, provides that: "It is not the intent of the General Assembly to affect the law applicable to litigation pending as of February 19, 2014."

- For article surveying 1979 legislative developments in commercial law, see 31 Mercer L. Rev. 13 (1979). For article on Georgia's usury laws and interest on interest, see 8 Ga. St. U.L. Rev. 291 (1992). For annual survey on construction law, see 65 Mercer L. Rev. 67 (2013). For note discussing the reservation of interest at highest lawful rate as constituting usury, see 1 Ga. L. Rev. No. 2 p. 38 (1927). For note discussing problems with profits generated by escrow account, and proposing federal legislative reform, see 10 Ga. St. B.J. 618 (1974). For note discussing whether a holder in due course takes free of claims of violations of the usury laws, see 12 Ga. L. Rev. 814 (1978).

ANALYSIS

• General Consideration
• Interest and Other Charges
• Usury
• Forfeiture of Interest
• Written Contract
• Acceleration
• Interest after Maturity
• Attorney Fees
• Jury/Court Determinations

General Consideration

Editor's notes.

- Many of the cases cited below were decided under this Code section as it read prior to the 1983 amendment, which extensively rewrote this Code section.

- Purpose of the statute against usury is, at most, only a check on the conscience of the lender. The necessity to borrow on one hand, and greed on the other, prompted the legislature, no doubt, to fix from time to time a limit on the value of money. This value is merely arbitrary in the legislative mind. Green v. Equitable Mtg. Co., 107 Ga. 536, 33 S.E. 869 (1899).

- In a suit seeking to confirm an arbitration award, a corporation was entitled to an award of interest in accordance with O.C.G.A. § 7-4-2(a)(1)(A) on any unpaid portion of the arbitration award for the period between when the award was made and when the court entered final judgment confirming the award; state law, rather than federal law, applied because the court's jurisdiction was based on diversity. Bryant Motors, Inc. v. Blue Bird Body Co., F. Supp. 2d (M.D. Ga. Aug. 22, 2007).

- At the relevant times asserted in an adversary proceeding asserted by a Chapter 7 trustee, the legal rate of interest under 28 U.S.C. § 1961 was less than the Georgia legal rate of interest of seven percent. Silliman v. Benson (In re Metro Builders Supply, Inc.), Bankr. (Bankr. N.D. Ga. Oct. 4, 2007).

- Former Code 1933, § 57-101 (see now O.C.G.A. § 7-4-102) sets forth interest rate chargeable when none is named in contract. Hopkins v. West Publishing Co., 106 Ga. App. 596, 127 S.E.2d 849 (1962).

- Generally, the terms legal interest and lawful interest have different meanings. The former means exact rate of interest named in statute, while latter means anything up to maximum rate which law allows. Daniel v. Gibson, 72 Ga. 367, 53 Am. R. 845 (1884).

Legal interest rates are prima facie "equitable" and any award deviating from the legal rates must be based on sufficient evidence demonstrating that another rate is appropriate. Atlantic States Constr., Inc. v. Beavers, 169 Ga. App. 584, 314 S.E.2d 245 (1984).

Promise of liberal interest will not justify more than the legal interest. Weaver v. Chauncey, 43 Ga. 343 (1871).

- In a suit by a lender on a note and guaranties, the note's postdefault interest rate was only three percent higher than the predefault rate of five percent, so the total rate of eight percent per year was well within the legal limit of 60 percent and was permissible under O.C.G.A. §§ 7-4-2(a)(1)(B) and7-4-18(a). MMA Capital Corp. v. ALR Oglethorpe, LLC, 336 Ga. App. 360, 785 S.E.2d 38 (2016).

These provisions apply to counties, as well as to individuals. A county is bound to pay eight percent interest when that rate is specified in writing, if there is compliance with all other legal requirements. Americus Grocery Co. v. Pitts Banking Co., 169 Ga. 70, 149 S.E. 776 (1929), overruled on other grounds, Marion County v. First Nat'l Bank, 193 Ga. 263, 18 S.E.2d 475 (1942).

- Director was properly awarded 12 percent interest on a lost wages award as lost wages were not open accounts under O.C.G.A. § 7-4-2. Gallagher v. McKinnon, 273 Ga. App. 727, 615 S.E.2d 746 (2005).

- See Cooper v. National Bank, 21 Ga. App. 356, 94 S.E. 611 (1917), cert. denied, 246 U.S. 670, 38 S. Ct. 423, 62 L. Ed. 931 (1918), aff'd, 251 U.S. 108, 40 S. Ct. 58, 64 L. Ed. 171 (1919). See also 12 USC §§ 85 and 86, and annotations relating thereto.

- Federal savings and loan association doing business in this state is subject to usury laws and in making loans must comply with provisions thereof. However, such association may require borrower to pay necessary initial charges in connection with making of loan. First Fed. Sav. & Loan Ass'n v. Norwood Realty Co., 212 Ga. 524, 93 S.E.2d 763 (1956).

§ 7-3-1 et seq.) and former Code 1933, § 57-101 (see now O.C.G.A. § 7-4-2) as to pawn-brokers. - See Wall v. Lewis, 192 Ga. 652, 16 S.E.2d 430 (1941).

- Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) operates generally upon entire class of subjects with which it deals, uniformly throughout the state and in the same manner generally as the usury statute. Talley v. Sun Fin. Co., 223 Ga. 419, 156 S.E.2d 55 (1967).

Acts 1912, p. 144 (see now O.C.G.A. § 7-4-10(a)) was not invalid as special law for which provision had been made by former Civil Code 1910, §§ 3426 and 3436 (see now O.C.G.A. § 7-4-2). South Ga. Mercantile Co. v. Lance, 143 Ga. 530, 85 S.E. 749 (1915).

Section not repealed by §§ 36-11-3 through 36-11-6. - Former Code 1933, § 23-1605 (see now O.C.G.A. §§ 36-11-3 through36-11-6) did not expressly or impliedly repeal former Code 1933, §§ 57-101 and 57-110 (see now O.C.G.A. §§ 7-4-2,7-4-15), and former Code 1933 § 14-207 (see now O.C.G.A. § 11-3-108). They all were to be considered together, and when so considered, the sections first mentioned contemplate administrative action by county officers in regard to the order in which lawful county orders should be paid. Marion County v. First Nat'l Bank, 193 Ga. 263, 18 S.E.2d 475 (1942).

- The 1975 amendments to former Code 1933, § 57-101 (see now O.C.G.A. § 7-4-2) were not intended to supersede floating interest rates permitted by Public Law 93-501. Kennedy v. Brand Banking Co., 245 Ga. 496, 266 S.E.2d 154 (1980).

- No damages for mere nonpayment of money can ever be so liquidated between parties as to evade provisions of law which fix rate of interest. Clark, Austin & Smith v. Kay, 26 Ga. 403 (1858).

- Maker of note having expressly contracted to pay interest annually, holder is entitled to recover interest when due, whether principal is due or not. Calhoun v. Marshall, 61 Ga. 275, 34 Am. R. 99 (1878); Ray v. Pease, 97 Ga. 618, 25 S.E. 360 (1895).

Underwriting is not an agreement to loan money. Stewart v. Miller & Co., 161 Ga. 919, 132 S.E. 535, 45 A.L.R. 599 (1926).

- When guaranty, entered into by separate instrument, does not contain stipulated interest rate, guarantors are liable only for legal rate of 7 percent annually. FDIC v. Willis, 497 F. Supp. 272 (S.D. Ga. 1980).

- Promissory note contained the promise to pay 7 percent interest and 5 percent for attorneys fees, if the note should be collected by suit. The promise to pay the attorneys fees is a part of the principal debt. Baxter v. Bates, 69 Ga. 587 (1882).

- See Tribble v. Anderson, 63 Ga. 31 (1878); Green v. Equitable Mtg. Co., 107 Ga. 536, 33 S.E. 869 (1899); Stewart v. Slocumb, 120 Ga. 762, 48 S.E. 311 (1904).

- Parties waived any objection to the statutory rate of seven percent by failing to object to the rate in the trial court, although the parties' contract provided for a lower rate. Sovereign Healthcare v. Mariner Health Care Mgmt. Co., 329 Ga. App. 782, 766 S.E.2d 172 (2014).

- In a suit challenging the bank's overdraft fees, the trial court did not abuse the court's discretion in certifying the class because the legality of fees required the examination of a common set of terms in identical form contracts that applied to all members of the putative class as the claims arising from an interpretation of form agreements were classic cases for treatment as a class action. SunTrust Bank v. Bickerstaff, 349 Ga. App. 794, 824 S.E.2d 717 (2019), cert. denied, No. S19C1080, 2019 Ga. LEXIS 862 (Ga. 2019).

Cited in Houser v. Planters' Bank, 57 Ga. 95 (1876); Daniel v. Gibson, 72 Ga. 367, 53 Am. R. 845 (1884); Partridge v. William's Sons, 72 Ga. 807 (1884); Cleghorn v. Greeson, 77 Ga. 343 (1886); Crane v. Goodwin, 77 Ga. 362 (1886); Jackson v. Garner, 79 Ga. 415, 7 S.E. 213 (1887); Mackenzie v. Flannery & Co., 90 Ga. 590, 16 S.E. 710 (1892); Union Sav. Bank & Trust Co. v. Dottenheim, 107 Ga. 606, 34 S.E. 217 (1899); Mohr-Weil Lumber Co. v. Russell, 109 Ga. 579, 34 S.E. 1005 (1900); Harrell v. Blount, 112 Ga. 711, 38 S.E. 56 (1901); McCall v. Herring, 116 Ga. 235, 42 S.E. 468 (1902); Howell v. Pennington, 118 Ga. 494, 45 S.E. 272 (1903); Ver Nooy v. Pitner, 17 Ga. App. 29, 86 S.E. 456 (1915); Croom v. Jordan, 20 Ga. App. 802, 93 S.E. 538 (1917); Long v. Gresham, 148 Ga. 170, 96 S.E. 211 (1918); Glynn County v. Dubberly, 148 Ga. 290, 96 S.E. 566 (1918); Bank of Lumpkin County v. Justus, 150 Ga. 286, 103 S.E. 794 (1920); Flint River Pecan Co. v. Fry, 29 F.2d 457 (5th Cir. 1928); Pitts v. Pease, 39 F.2d 14 (5th Cir. 1930); Leathers v. Auto Sales Co., 46 Ga. App. 85, 166 S.E. 838 (1932); Folsom v. Continental Adjustment Corp., 48 Ga. App. 435, 172 S.E. 833 (1934); Penn Mut. Life Ins. Co. v. Marshall, 49 Ga. App. 287, 175 S.E. 412 (1934); Nash Loan Co. v. Dixon, 181 Ga. 297, 182 S.E. 23 (1935); Gore v. Industrial Loan & Sav. Co., 52 Ga. App. 401, 183 S.E. 499 (1936); Osborne v. National Realty Mfg. Co., 182 Ga. 892, 187 S.E. 56 (1936); Ellis v. Williams, 56 Ga. App. 181, 192 S.E. 491 (1937); Denson v. Peoples Bank, 58 Ga. App. 518, 199 S.E. 324 (1938); Peoples Bank v. Mayo, 61 Ga. App. 877, 8 S.E.2d 405 (1940); Kent v. Hibernia Sav., Bldg. & Loan Ass'n, 193 Ga. 546, 19 S.E.2d 264 (1942); Southern Feed Stores v. Sanders, 193 Ga. 884, 20 S.E.2d 413 (1942); Hartsfield Co. v. Watkins, 67 Ga. App. 411, 20 S.E.2d 440 (1942); United States v. A Certain Tract or Parcel of Land, 47 F. Supp. 30 (S.D. Ga. 1942); Butler v. Reisman, 70 Ga. App. 654, 29 S.E.2d 433 (1944); Graham v. Lynch, 206 Ga. 301, 57 S.E.2d 86 (1950); McConnell v. Shropshire, 80 Ga. App. 677, 57 S.E.2d 293 (1950); Carroll v. Taylor, 87 Ga. App. 815, 75 S.E.2d 346 (1953); M.B. Dale, Inc. v. Dawson County Bank, 112 Ga. App. 560, 145 S.E.2d 619 (1965); Harrison v. Arrendale, 113 Ga. App. 118, 147 S.E.2d 356 (1966); Colter v. Consolidated Credit Corp., 115 Ga. App. 408, 154 S.E.2d 713 (1967); Service Loan & Fin. Corp. v. McDaniel, 115 Ga. App. 548, 154 S.E.2d 823 (1967); Cochran v. Bank of Hancock County, 118 Ga. App. 100, 162 S.E.2d 765 (1968); Fried v. Morris & Eckels Co., 118 Ga. App. 595, 164 S.E.2d 732 (1968); Vezzani v. Tallant, 121 Ga. App. 67, 172 S.E.2d 858 (1970); Lewis v. Termplan, Inc., 124 Ga. App. 507, 184 S.E.2d 473 (1971); Poteat v. Butler, 231 Ga. 187, 200 S.E.2d 741 (1973); Finlay v. Oxford Constr. Co., 139 Ga. App. 801, 230 S.E.2d 69 (1976); Green v. Decatur Fed. Sav. & Loan Ass'n, 143 Ga. App. 368, 238 S.E.2d 740 (1977); Adcock v. First Nat'l Bank, 144 Ga. App. 394, 241 S.E.2d 289 (1977); Plunkett v. Francisco, 430 F. Supp. 235 (N.D. Ga. 1977); Farmers Mut. Exch. of Wrens, Inc. v. Rabun, 145 Ga. App. 798, 245 S.E.2d 52 (1978); Reid v. National Bank, 149 Ga. App. 834, 256 S.E.2d 82 (1979); Gorlin v. First Nat'l Bank, 150 Ga. App. 637, 258 S.E.2d 290 (1979); Sumner v. Adel Banking Co., 244 Ga. 73, 259 S.E.2d 32 (1979); Peterson v. Newton, 151 Ga. App. 852, 261 S.E.2d 763 (1979); Commercial Credit Plan, Inc. v. Parker, 152 Ga. App. 409, 263 S.E.2d 220 (1979); Williams v. Public Fin. Corp., 598 F.2d 349 (5th Cir. 1979); Kellos v. Parker-Sharpe, Inc., 245 Ga. 130, 263 S.E.2d 138 (1980); Laminoirs-Trefileries-Cableries de Lens, S.A. v. Southwire Co., 484 F. Supp. 1063 (N.D. Ga. 1980); Lennon v. Aeck Assocs., 157 Ga. App. 294, 277 S.E.2d 289 (1981); Thompson v. Hurt, 159 Ga. App. 656, 284 S.E.2d 671 (1981); FDIC v. Lattimore Land Corp., 656 F.2d 139 (5th Cir. 1981); Barge & Co. v. City of Atlanta, 161 Ga. App. 675, 288 S.E.2d 98 (1982); Prince v. Lee Roofing Co., 161 Ga. App. 181, 288 S.E.2d 135 (1982); Willis v. Rabun County Bank, 161 Ga. App. 151, 291 S.E.2d 52 (1982); Scott v. Leder, 164 Ga. App. 334, 297 S.E.2d 103 (1982); Bulman v. First Nat'l Bank, 165 Ga. App. 843, 303 S.E.2d 29 (1983); Varner v. Century Fin. Corp., 253 Ga. 27, 317 S.E.2d 178 (1984); Ehrman v. Manning, 177 Ga. App. 442, 339 S.E.2d 652 (1986); Gold Kist Peanuts v. Alberson, 178 Ga. App. 253, 342 S.E.2d 694 (1986); McDermott v. Middle E. Carpet Co., 811 F.2d 1422 (11th Cir. 1987); Weprin v. Peterson, 736 F. Supp. 1131 (N.D. Ga. 1988); Moore v. Comfed Sav. Bank, 908 F.2d 834 (11th Cir. 1990); American Mini-Storage, Marietta Blvd., Ltd. v. Investguard, Ltd., 196 Ga. App. 862, 397 S.E.2d 199 (1990); Equicor, Inc. v. Stamey, 216 Ga. App. 375, 454 S.E.2d 550 (1995); Felker v. Chipley, 246 Ga. App. 296, 540 S.E.2d 285 (2000); S & A Indus. v. Bank Atlanta, 247 Ga. App. 377, 543 S.E.2d 743 (2000); Colonial Bank v. Boulder Bankcard Processing, Inc., 254 Ga. App. 686, 563 S.E.2d 492 (2002); In the Matter of Babson, 283 Ga. 382, 659 S.E.2d 384 (2008).

Interest and Other Charges

Method of expressing interest rate.

- Requirement that the rate of interest be expressed in simple interest terms does not mandate numerical terminology but the requirement is met by the expression of the method of computation of interest by reference to "prime" or other indices such as "base." 1600 Capital Co. v. Bankers First Fed. Sav. & Loan Ass'n, 187 Ga. App. 504, 370 S.E.2d 668 (1988).

Note must state the rate of interest in simple interest terms. Orix Credit Alliance, Inc. v. CIT Group/Equipment Fin., Inc., 230 Bankr. 213 (Bankr. M.D. Ga. 1998).

- See Patton v. Bank of La Fayette, 124 Ga. 965, 53 S.E. 664, 5 L.R.A. (n.s.) 592, 4 Ann. Cas. 639 (1906), overruled on other grounds, Sharpe v. Department of Transp., 267 Ga. 267, 476 S.E.2d 722 (1996).

Former Civil Code 1895, § 2886 (see now O.C.G.A. § 7-4-2) spoke of years and not of months. A legal year is 365 days. Patton v. Bank of La Fayette, 124 Ga. 965, 53 S.E. 664, 5 L.R.A. (n.s.) 592, 4 Ann. Cas. 639 (1906), overruled on other grounds, Sharpe v. Department of Transp., 267 Ga. 267, 476 S.E.2d 722 (1996).

- Lender's charge for service which was not in fact rendered or to be rendered the borrower is a charge for use of money advanced and is therefore interest. Williams v. First Bank & Trust Co., 154 Ga. App. 879, 269 S.E.2d 923 (1980).

- When purchase price of machinery for necessary improvement of public roads becomes a liquidated demand, as by issuance of county warrant drawn on county treasurer by county commissioners, payable to vendor for purchase price, interest which may thereafter lawfully accrue upon warrant is incidental, and is not to be counted as part of debt for which warrant was issued. Marion County v. First Nat'l Bank, 193 Ga. 263, 18 S.E.2d 475 (1942).

Prepayment penalty clause was permissible under O.C.G.A. § 7-4-21(a)(1) since the clause was in reality a charge and use of the term "interest" in the clause was merely a device for determining the amount of the charge. In re Curtis, 83 Bankr. 853 (Bankr. S.D. Ga. 1988).

Escrow account charges in a loan for the purchase of real property did not amount to a disguised interest charge since there was a realistic correspondence between the monthly escrow deposit and the annual tax liability and insurance premium covering the property. In re Curtis, 83 Bankr. 853 (Bankr. S.D. Ga. 1988).

- There is no requirement as a matter of law for the lender to pay the borrower interest on funds escrowed for valid business reasons such as a reserve for replacement of deteriorating equipment. Knight v. First Fed. Sav. & Loan Ass'n, 151 Ga. App. 447, 260 S.E.2d 511 (1979).

- While a landlord can recover unpaid rent and is also entitled to recover the legal rate of interest on the unpaid rental money, it does not follow that an agreement in a lease providing for a late charge when the rent is not timely paid must comply with O.C.G.A. § 7-4-2. Krupp Realty Co. v. Joel, 168 Ga. App. 480, 309 S.E.2d 641 (1983).

- Having found there was no jury issue as to whether the buyers owed the earnest money payment plus interest to sellers under the contract, as well as under principles of promissory estoppel, the trial court erred in failing to award such interest for the period money was due until final judgment. Ware v. Renfroe, 231 Ga. App. 529, 499 S.E.2d 907 (1998).

Because the defendant neither filed a compulsory counterclaim nor pled a set-off as an affirmative defense, there was no error in the trial court's failure to provide for a set-off for lease deposits prior to calculating pre-judgment and post-judgment interest. American Medical Transp. Group, Inc. v. Glo-An, Inc., 235 Ga. App. 464, 509 S.E.2d 738 (1998).

In an action in which the lenders demanded payment of a loan to the debtor before the date of trial, and after a date set by the debtor that the debtor would repay the loan, the lenders were entitled to prejudgment interest up and until the day of trial on the unpaid loan balance at the legal rate of interest. Gray v. King, 270 Ga. App. 855, 608 S.E.2d 320 (2004).

Trial court erred when the court imposed a fixed rate of interest on a judgment obtained by a class of retirees in their action against the Teachers Retirement System of Georgia, arising from their claims that the retirees were not paid the appropriate amounts for their retirement benefits, as there was no pre- or post-judgment interest rate established by the written contract between the parties that governed those payments, such that the statutory rates of seven percent and prime plus three percent should have been applied pursuant to O.C.G.A. §§ 7-4-2(a)(1)(A) and7-4-12(a); another interest rate that was set by the System in a regulation was not applicable to the instant matter. Teachers Ret. Sys. v. Plymel, 296 Ga. App. 839, 676 S.E.2d 234 (2009).

Because the defendant's damages on the defendant's suit on account counterclaim were fixed, certain, and ascertainable making the damages liquidated (plaintiff conceded that the plaintiff received and never paid for $1,017,551 worth of GPS units from the defendant), the district court erred in failing to award the defendant pre-judgment interest at the legal rate established by O.C.G.A. § 7-4-2. Discrete Wireless, Inc. v. Coleman Techs., Inc., F.3d (11th Cir. Apr. 5, 2011)(Unpublished).

In breach-of-contract actions in all cases when an amount ascertained would be the damages at the time of the breach, it may be increased by the addition of legal interest from that time until the recovery. Goody Prods. v. Dev. Auth. of Manchester, 320 Ga. App. 530, 740 S.E.2d 261 (2013).

In a condemnation action, the property owner was properly awarded prejudgment interest on the purchase price on a second parcel because the price was fixed, certain, and ascertainable under the terms of the parties' contract such that the debt owed by the county was liquidated and subject to prejudgment interest under O.C.G.A. § 7-4-15. Gwinnett County v. Old Peachtree Partners, LLC, 329 Ga. App. 540, 764 S.E.2d 193 (2014).

- When the claim was undisputed, the defendant was entitled to prejudgment interest at the rate of seven percent per annum from the date the debt became due and the trial court's judgment of prejudgment interest of 18% per annum was in excess of the statutorily required amount. Turner Constr. Co. v. Electrical Distribs., Inc., 202 Ga. App. 726, 415 S.E.2d 325 (1992).

Trial court erred in awarding the prevailing party in a contract dispute prejudgment interest at the rate of 12 percent per annum; instead, the legal rate of interest of only seven percent per annum pursuant to O.C.G.A. § 7-4-2(a) was appropriate. Murray v. Barrett, 257 Ga. App. 438, 571 S.E.2d 448 (2002).

- Pursuant to instructions from the trial court, while the jury was authorized under O.C.G.A. § 13-6-13 to increase the $24,698.39 in breach of contract damages by adding prejudgment legal interest to damages at the rate of seven percent per annum simple interest from the date of the breach, the jury's general verdict on the breach of contract claim in amount of $42,690.05 was in excess of any recovery authorized by the evidence; as a result, the judgment entered on the verdict had to be reversed and the case remanded for new trial. Chacon v. Holcombe, 290 Ga. App. 767, 660 S.E.2d 851 (2008).

- In a contract action, a party was not entitled to prejudgment and postjudgment interest when deposits were made pursuant to the requirements of O.C.G.A. § 9-11-67. Sacha v. Coffee Butler Serv., Inc., 215 Ga. App. 280, 450 S.E.2d 704 (1994).

- Trial court did not err in awarding a creditor a money judgment, plus interest, because the interest owed was established by the debtor's own admission on the stand; in a case when the interest owed is established by a party's own admission on the stand, no writing is necessary. Allen v. Santana, 303 Ga. App. 844, 695 S.E.2d 314 (2010).

- Trial court did not err by rejecting a debtor's argument that a lender's temporary acceptance of lowered payments without waiving full payment transformed the loan into a usurious transaction because the interest rate of the loan was not in excess of the maximum applicable legal rate of 5 percent per month under O.C.G.A. § 7-4-18(a). Latimore v. Vatacs Group, Inc., 317 Ga. App. 98, 729 S.E.2d 525 (2012).

- In this breach of contract action, it was error to compound the interest because the parties' agreement stated that late amounts under the contract would "be subject to interest at the lesser of 1.5% per month or the maximum allowed by applicable law." Caradigm USA LLC v. PruittHealth, Inc., 964 F.3d 1259 (11th Cir. 2020).

Usury

1. In General

- Usury is excess over legal interest charged by lender for use of the lender's money. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199 (1935).

- Loan violative of the criminal usury statute is illegal with the result that the lender forfeits the interest but may collect the principal. Norris v. Sigler Daisy Corp., 260 Ga. 271, 392 S.E.2d 242 (1990).

- Under law of Georgia, intent to circumvent usury laws is prerequisite to existence of usury. Camilla Cotton Oil Co. v. Spencer Kellogg & Sons, 257 F.2d 162 (5th Cir. 1958).

- There are four elements of a usurious transaction under Georgia law: (1) loan or forbearance of money, either express or implied; (2) upon understanding that principal shall or may be returned; and that (3) for such loan or forbearance a greater profit than is authorized by law shall be paid; and (4) that contract was made with intent to violate the law. Element of intent may be implied if all other elements are expressed upon face of contract. Bank of Lumpkin v. Farmers State Bank, 161 Ga. 801, 132 S.E. 221 (1926); Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008 (5th Cir. 1979); Hershiser v. Yorkshire Condominium Ass'n, 201 Ga. App. 185, 410 S.E.2d 455 (1991).

- In determining whether contract is usurious, substance of transaction will be critically inspected and analyzed; for name by which transaction is denominated is altogether immaterial if it appears that a loan of money was the basis of agreement which is under consideration. Bank of Lumpkin v. Farmers State Bank, 161 Ga. 801, 132 S.E. 221 (1926).

Court must look not at form and words, but at substance of transaction; and as, on the one hand, it should not pay attention to words of transaction, or manner in which the transaction was negotiated, if substance of it went to defeat the statute against usury, so, on the other hand, it ought not to rely upon words or form of transaction, if in substance such transaction was legal. Murdock Acceptance Corp. v. Wagnon, 587 F.2d 764 (5th Cir. 1979).

- Usury being an excess of legal interest, it was a violation of former Code 1933, § 57-101 to reserve and take usury or to contract to reserve and take usury. Newcomb v. Niskey's Lake, Inc., 190 Ga. 565, 10 S.E.2d 51, answer conformed to, 63 Ga. App. 811, 12 S.E.2d 160 (1940).

It was a violation to reserve and take usurious interest, or to contract to reserve and take usurious interest. Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008 (5th Cir. 1979).

- In the absence of a savings clause, repeal of a usury limit operates retroactively to lift the penalty for usury. Doyle v. Southern Guar. Corp., 795 F.2d 907 (11th Cir. 1986), cert. denied, 484 U.S. 926, 108 S. Ct. 289, 98 L. Ed. 2d 249 (1987).

When defense of usury was not raised until after the 1983 amendment of O.C.G.A. § 7-4-2 became effective, the interest rates at issue are legal so long as those rates conform to the limits contained in § 7-4-2(a)(1). Ward v. Hudco Loan Co., 254 Ga. 294, 328 S.E.2d 729 (1985).

- In a class action suit seeking to hold a lender liable for payday loans, the trial court did not err in concluding that genuine issues of material fact existed as to whether the lender was the true lender of the loans made after May 14, 2004, because evidence was presented sufficient to create a genuine issue of material fact regarding whether the lender actually received only a 49 percent economic interest for the lender's services and even if the lender did so, whether the lender nevertheless, by contrivance, device, or scheme, attempted to avoid the provisions of O.C.G.A. § 16-17-2(a). Ga. Cash Am. v. Greene, 318 Ga. App. 355, 734 S.E.2d 67 (2012).

- Initial charges in the form of discount points and other interest charges during the first month of the loan should be amortized over the life of the loan to calculate what interest rate was charged "per month." Johnson v. Fleet Fin., Inc., 785 F. Supp. 1003 (S.D. Ga. 1992), aff'd, 4 F.3d 946 (11th Cir. 1993).

Actual declining principal balance method should be used in determining whether irregularly amortized loan is usurious because usury on a particular loan can only be determined by proper reference to the actual outstanding principal balance on that loan. Southern Fed. Sav. & Loan Ass'n v. Lyle, 249 Ga. 284, 290 S.E.2d 455 (1982).

- Taint of usury results not from payment of usurious interest, but from agreement to do so, whether performed or unperformed. Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008 (5th Cir. 1979).

Terms of contract rather than actual turn of events are to be used in computing usury. Knight v. First Fed. Sav. & Loan Ass'n, 151 Ga. App. 447, 260 S.E.2d 511 (1979).

- Contracts to pay usury are unlawful, but only as to the usurious interest; but mere illegality in consideration is not sufficient to defeat rights of an innocent holder. Weed v. Gainesville, Jefferson & S. R.R., 119 Ga. 576, 46 S.E. 885 (1904).

- Law recognizes a seller's right to make a difference in the seller's cash price and the seller's time price for the seller's property; and, though in a given instance this difference may exceed the maximum allowable rate, usury laws are not applicable. If, however, property is sold at a cash price, and time is given by vendor to purchaser upon a portion of the purchase money, and a greater rate of interest than that allowed by law is charged on such deferred payments, the contract is usurious. Murdock Acceptance Corp. v. Wagnon, 587 F.2d 764 (5th Cir. 1979).

While it is lawful and not usurious to charge one price for property sold for cash and a higher price for same property if sold on credit, if contract is that property be sold at cash valuation, and that certain payments are to be deferred in consideration of a greater rate of interest than that allowed by law, such contract is usurious. Irvin v. Mathews, 75 Ga. 739 (1885); Rushing v. Worsham & Co., 102 Ga. 825, 30 S.E. 541 (1898); Ozmore v. Coram, 133 Ga. 250, 65 S.E. 448 (1909); Plastics Dev. Corp. v. Flexible Prods. Co., 112 Ga. App. 460, 145 S.E.2d 655 (1965).

- Defendant did not prevail on defendant's claim of usury because the amount of the note, $2.3 million, is outside the provisions of Georgia's usury statute. Barton v. Marubeni Am. Corp., 204 Ga. App. 346, 419 S.E.2d 342 (1992).

- While it is well established that parol evidence cannot be used to add to or change terms of valid written contract, the rule does not apply to contract which is usurious and, therefore, invalid. Pickens Inv. Co. v. Jones, 82 Ga. App. 850, 62 S.E.2d 753 (1950).

- When a promissory note on the note's face bore interest at 6 percent, and, after the note fell due and was unpaid, the makers in consideration of the holders delaying to enforce collection agreed in parol to pay 8 percent interest thereon and for two years interest was paid at this rate, such payments were valid, and interest in excess of 6 percent could neither be recovered, nor thereafter applied as a credit on the principal of the note. Strickland v. Bank of Cartersville, 141 Ga. 565, 81 S.E. 886 (1914).

- When loan had been made at less than maximum rate of interest, the debtor must prove that escrow arrangement was a device to exact interest in excess of the lawful rate, and the debtor must show the exact amount of claimed excess and how the excess was computed. Knight v. First Fed. Sav. & Loan Ass'n, 151 Ga. App. 447, 260 S.E.2d 511 (1979).

To purge contract of usury it must be wholly abandoned or cancelled, and a new obligation undertaken containing no part of the usury. Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008 (5th Cir. 1979).

- Allegedly usurious loan transaction cannot be purged of usurious taint through unilateral action of lender. Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008 (5th Cir. 1979).

Under the look-through rule, a hypothetical coercive claim was the basis for federal jurisdiction over the petitioner bank's Federal Arbitration Act petition, but petitioner payday loan companies' arbitration petition was precluded by a related underlying state court judgment holding the companies in contempt and, striking the companies' arbitration defenses under O.C.G.A. § 9-11-37(b)(2) to respondent borrower's suit alleging violations of Georgia's usury statute, O.C.G.A. § 7-4-1 et seq., Georgia's Industrial Loan Act, O.C.G.A. § 7-3-1 et seq.; and Georgia's Racketeer Influenced and Corrupt Organizations statute, O.C.G.A. § 16-14-1 et seq. Cmty. State Bank v. Strong, 651 F.3d 1241 (11th Cir. 2011), cert. denied, 568 U.S. 813, 133 S. Ct. 101, 184 L. Ed. 2d 22 (2012).

Only when prepaid sums and stipulated interest together exceed lawful interest is a transaction usurious. Scheil v. Georgia Fed. Sav. & Loan Ass'n, 154 Ga. App. 714, 269 S.E.2d 881 (1980).

- Taking or reserving in advance of interest at highest legal rate, whether in short or long term loan, is usurious. Haley v. Covington, 19 Ga. App. 782, 92 S.E. 297 (1917); Kent v. Hibernia Sav., Bldg. & Loan Ass'n, 190 Ga. 764, 10 S.E.2d 759 (1940), later appeal, 193 Ga. 546, 19 S.E.2d 264 (1942).

- Reserving of interest in advance at highest legal rate on a loan, whether it be a short or long-term loan, is usurious; and deed to land given to secure promissory note for such a loan is void on account of usury. Loganville Banking Co. v. Forrester, 143 Ga. 302, 84 S.E. 961, 1915D L.R.A. 1195 (1915); Reese v. Bloodworth, 146 Ga. 355, 91 S.E. 120 (1917).

- Charge by lender as a commission, deducted from a loan evidenced by bonds of the borrower, which carry full rate of lawful interest was usury. Newcomb v. Niskey's Lake, Inc., 190 Ga. 565, 10 S.E.2d 51, answer conformed to, 63 Ga. App. 811, 12 S.E.2d 160 (1940).

- Former § 7-4-7, which removed the former nine percent rate ceiling on loans exceeding $100,000 in certain situations, was not applicable when there were eleven separate loans and notes, none of which amounted to $100,000, although the total principal balance was over $100,000, and although the borrower paid the interest on all eleven notes with one check. Henson v. Columbus Bank & Trust Co., 770 F.2d 1566 (11th Cir. 1985) (decided under former § 7-4-7).

- Escrow fund is usurious only when the lender's requirement that the borrower maintain such a deposit is in fact merely a scheme or device by which the intent to extract excess interest is concealed. Knight v. First Fed. Sav. & Loan Ass'n, 151 Ga. App. 447, 260 S.E.2d 511 (1979).

- Stipulation in bonds to pay, in addition to lawful interest, a percentage of federal income taxes that might be imposed upon the bonds is usurious. Newcomb v. Niskey's Lake, Inc., 190 Ga. 565, 10 S.E.2d 51, answer conformed to, 63 Ga. App. 811, 12 S.E.2d 160 (1940).

- Petition alleging: (1) sum upon which paid; (2) time when contract was made; (3) when payable; and (4) amount of usury agreed upon, sufficiently pleads usury. Pickens Inv. Co. v. Jones, 82 Ga. App. 850, 62 S.E.2d 753 (1950).

- When lender requires, as condition precedent to making loan upon which full legal rate of interest is expressly charged, that the borrower shall assume and pay off a promissory note held by the lender against one who is known by the lender to be insolvent, and whose debt the borrower is under no obligation to pay, the transaction is usurious. Bishop v. Exchange Bank, 114 Ga. 962, 41 S.E. 43 (1902).

- Portion of the judgment awarding interest at a rate greater than the seven percent was vacated and the case was remanded to the trial court for recalculation of the interest at the correct rate because with an indefinite rate expressed in the subdivision declaration, the seven percent per year rate mandated by O.C.G.A. § 7-4-2(a)(1)(A) governed the rate of interest allowed by the declaration. Lend A Hand Charity, Inc. v. Ford Plantation Club, Inc., 338 Ga. App. 594, 791 S.E.2d 180 (2016).

3. Transactions Held Not Usurious

Excess over legal rate paid for other considerations not usurious.

- When excess over legal interest is paid for other good and valuable considerations beyond mere use of money, it is not usury. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199 (1935).

- Contract not usurious when by mistake a few cents more than legal rate is charged. Rushing v. Willingham, 105 Ga. 166, 31 S.E. 154 (1898); Loganville Banking Co. v. Forrester, 143 Ga. 302, 84 S.E. 961, 1915D L.R.A. 1195 (1915).

- Contract to pay maximum rate of interest per annum semi-annually, with interest on semi-annual payments of interest after due, did not constitute usury. Pendergrass v. New York Life Ins. Co., 163 Ga. 671, 137 S.E. 36 (1927).

- When the principal amount of the homeowners' mortgage was $61,850 with accrued interest at the rate of 13 percent per year, this interest was not in violation of O.C.G.A. § 7-4-2. English v. Liberty Mtg. Corp., 205 Ga. App. 141, 421 S.E.2d 286 (1992).

- Interest rate based upon a daily charge equal to the annual rate divided by 360 is not usurious per se. Mom Corp. v. Chattahoochee Bank, 203 Ga. App. 847, 418 S.E.2d 74 (1992).

- It is lawful to include in a promissory note amount of interest at legal rate, which will be due at its maturity, and to provide that sum represented by principal and such interest shall bear interest at maximum rate per annum from maturity. McCrary v. Woodard, 122 Ga. 793, 50 S.E. 941 (1905).

- When debtor who has been adjudicated bankrupt, but who has not obtained a discharge, arranges with one of the debtor's creditors for a loan of money on condition that the debtor will execute a note to cover the loan, with lawful interest and also amount of the debtor's previous indebtedness to creditor, such transaction is a valid and enforceable renewal of an antecedent debt, and a note is not usurious because the note contains a promise to pay the antecedent debt. Cameron v. Meador-Pasley Co., 39 Ga. App. 712, 148 S.E. 309 (1929).

- If sum was paid bona fide by way of compensation for professional services rendered by a lender, and did not enter into consideration moving lender to make loan, the transaction was not usurious. Sanders v. Nicolson, 101 Ga. 739, 28 S.E. 976 (1897).

- When property is conveyed to secure a debt, a stipulation that the borrower shall, in addition to legal interest, pay insurance premiums thereon is not usurious. New England Mtg. Sec. Co. v. Gay, 33 F. 636 (S.D. Ga. 1888), writ of error dismissed, 145 U.S. 123, 12 S. Ct. 815, 36 L. Ed. 646 (1892).

Premium for insurance required on collateral security for loan not counted as part of interest. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199 (1935).

Usury works forfeiture of all interest under the law. Newcomb v. Niskey's Lake, Inc., 190 Ga. 565, 10 S.E.2d 51, answer conformed to, 63 Ga. App. 811, 12 S.E.2d 160 (1940).

- If agreement is a mere device or subterfuge by which one party was permitted to charge a higher than lawful rate of interest for a loan of money, the agreement would be usurious, and the lender can collect no interest at all. Stewart v. Miller & Co., 161 Ga. 919, 132 S.E. 535, 45 A.L.R. 599 (1926).

- Plaintiff did not forfeit any right to interest on an open account for seeking a higher interest rate than that allowed by law since, before trial, the plaintiff amended the plaintiff's pleadings to seek the statutorily permitted rate of interest on commercial accounts. Belvin v. Houston Fertilizer & Grain Co., 169 Ga. App. 100, 311 S.E.2d 526 (1983).

Absent specification in writing, interest exceeding seven percent per annum may not be collected. Cosby v. A.M. Smyre Mfg. Co., 158 Ga. App. 587, 281 S.E.2d 332 (1981).

Portion awarding interest in a foreclosure judgment was vacated and the case remanded for recalculation of the interest rate pursuant to O.C.G.A. § 7-4-2 because § 7-4-2 governed the rate of interest in contracts when the interest rate was not specified and since the maximum legal rate specified in the declaration was not definite and ascertainable, the trial court erred in awarding 18 percent interest rather than the seven percent provided for by § 7-4-2. Northside Bank v. Mountainbrook of Bartow County Homeowners Ass'n, 338 Ga. App. 126, 789 S.E.2d 378 (2016).

- Former Civil Code 1910, § 3426, which provided that a contract to pay interest in excess of seven percent must be in writing, applied only to a contract containing an executory promise to pay such excess interest, and did not apply to a contract when such excess interest had been actually paid and accepted in consideration of a promise to extend time of payment of the principal sum. Lewis v. Citizens' & S. Bank, 31 Ga. App. 597, 121 S.E. 524 (1924), aff'd, 159 Ga. 551, 126 S.E. 392 (1925).

Designation of interest rate in terms of "prime" was "in writing" and thereby complied with laws of usury. Stewart v. National Bank, 174 Ga. App. 892, 332 S.E.2d 19 (1985).

Specification of interest in handwriting of debtor, signed by creditor, is sufficient. Wofford v. Wyly, 72 Ga. 863 (1884).

One seeking eight percent interest on alleged note must sue upon written instrument providing therefor. Ramsey v. Langley, 86 Ga. App. 544, 71 S.E.2d 863 (1952).

By accelerating payment on notes payable on or before maturity, maker avoids paying unearned interest. Garner v. Sisson Properties, Inc., 198 Ga. 203, 31 S.E.2d 400 (1944).

- In suit to recover balance on promissory note, award of interest on accelerated balance was limited to seven percent per annum, rather than nine percent which was sought, since there was no language in the note authorizing the collection of a higher rate upon declaration of default. Atlantic Bank & Trust Co. v. Fox, 157 Ga. App. 673, 278 S.E.2d 474 (1981).

Rate of interest specified in contract runs after maturity as well as before. Silvey v. McCool, 86 Ga. 1, 12 S.E. 175 (1890); Neal v. Brockhan, 87 Ga. 130, 13 S.E. 283 (1891).

- Post-maturity interest rate on outstanding balance does not constitute penalty or compensation for delay when rate is the same as interest rate of loan itself. Whitfield v. Termplan, Inc., 651 F.2d 383 (5th Cir. 1981).

- When promissory note contained a promise to pay principal, with interest from date at eight percent, in the absence of agreement, such rate will not extend beyond maturity of note, unless terms of the note itself expressly so provide. Sherwood v. Moore, 35 F. 109 (N.D. Ga. 1888).

Reasonable fee to lender's attorney for title examination was not considered commission for negotiation of loan. McCall v. Herring, 118 Ga. 522, 45 S.E. 442 (1903).

Jury/Court Determinations

Unless apparent on face of contract, question of usury is for jury.

- Question of whether one intends to exact usury by a contrivance or device or whether the alleged charge is bona fide for actual services is for the determination of the jury. Bank of Lumpkin v. Farmers State Bank, 161 Ga. 801, 132 S.E. 221 (1926).

If it is apparent on the face of the contract, the court may declare it to be usurious, but if doubtful question must be resolved by the jury. Pickens Inv. Co. v. Jones, 82 Ga. App. 850, 62 S.E.2d 753 (1950).

It is incumbent upon one attacking loan to show jury that it is in fact usurious; intent of lender to charge and collect more than legal rate of interest in violation of law is a question for the jury. Knight v. First Fed. Sav. & Loan Ass'n, 151 Ga. App. 447, 260 S.E.2d 511 (1979).

- When a transaction is not per se usurious, if it is claimed to be a device to cover up a charge of usury, a question of fact as well as a question of law is raised and the question should be submitted to the jury. Knight v. First Fed. Sav. & Loan Ass'n, 151 Ga. App. 447, 260 S.E.2d 511 (1979).

- Twelve percent rate of O.C.G.A. § 7-4-12 applies only to judgments; any interest accruing under O.C.G.A. § 22-2-113 for that period of time following an award of the special master until the jury verdict and entry of final judgment is to be at legal interest rate established by § 7-4-2. City of Atlanta v. Wright, 159 Ga. App. 809, 285 S.E.2d 250 (1981).

- Orders absolute given by inferior courts of this state for payment of money to other persons in liquidation of debts due by those courts draw interest just as other liquidated demands do, that is, those when sum is fixed, ascertained, and agreed to be paid bear interest at the rate of seven percent per annum. State ex rel. Greer v. Speer, 33 Ga. 93 (1864).

- Admiralty courts have discretion in awarding prejudgment interest so federal rather than state law controls, and there is no abuse of discretion in a federal court's award of ten percent prejudgment interest. The fact that the suit was brought under the court's diversity jurisdiction does not affect this conclusion. Kilpatrick Marine Piling v. Fireman's Fund Ins. Co., 795 F.2d 940 (11th Cir. 1986).

OPINIONS OF THE ATTORNEY GENERAL

Editor's notes.

- Many of the opinions cited below were rendered under this Code section as it read prior to the 1983 amendment, which extensively rewrote this Code section.

- Usury is not the taking of interest from the borrower at an unlawful rate, but rather it is receiving from any source a greater sum for use of money than the lawful interest. 1969 Op. Att'y Gen. No. 69-53.

- When no distinction is made between cash price and time price of an article, carrying charges are limited to legal rate of interest, plus any actual expense incurred by vendor incident to sale, such as fee for recording security instrument and reasonable protective insurance. 1954-56 Op. Att'y Gen. p. 448.

- If monthly service charge plan does not come within any specific exception set out by state law, then charge of one to one and a half percent per month of unpaid balance would probably be usurious. 1969 Op. Att'y Gen. No. 69-45.

- Merchant who makes cash advances of $3,000.00 or less is subject to the provisions of the Georgia Industrial Loan Act, O.C.G.A. § 7-3-1 et seq., rather than O.C.G.A. § 7-4-2(a)(2), unless the merchant charges eight percent simple interest per annum or less. 1984 Op. Att'y Gen. No. 84-79.

- If a loan or origination fee charged in connection with a non-real estate loan under $3,000 is not adduced based on the time value of money, if its use merely increases the lender's expectation of collecting in full the principal amount of the loan plus interest or if the fee is attributable to a service or benefit other than the extension of credit, and if the fee's factual justification is clearly documented in sufficient detail, such a fee should not be considered prepaid interest. 2003 Op. Att'y Gen. No. 2003-8.

- Overdraft fee will not be considered interest when the transaction is readily characterized as a checking account transaction, lacking the legal and economic reality of a loan or extension of credit, and when the fee is not determined based on the amount and time value of overdraft amounts. 2003 Op. Att'y Gen. No. 2003-9.

RESEARCH REFERENCES

Am. Jur. 2d.

- 44B Am. Jur. 2d, Interest and Usury, §§ 1, 3.

- 47 C.J.S., Interest and Usury; Consumer Credit, §§ 1 et seq., 84, 85.

- Provision in statute or ordinance limiting rate of interest per annum as precluding requirement of payment at maximum rate at intervals of less than a year, 29 A.L.R. 1109.

Validity of agreement to pay interest on interest, 37 A.L.R. 325; 76 A.L.R. 1484.

Construction of contractual provisions as to interest as regards time from which interest is to be computed, 69 A.L.R. 958.

Delay in paying over proceeds of loan to borrower as affecting question of usury, 76 A.L.R. 1467.

Obligations covering deferred payments of purchase money, or extension thereof, as loan or forbearance within usury laws, 91 A.L.R. 1105.

Validity, construction, and effect of express agreement releasing cause of action or defense based on exaction of usury, 99 A.L.R. 600.

Termination of interest, or reduction of interest rate, on deposit of public funds, 107 A.L.R. 1210.

Rate of interest chargeable against guardians, executors or administrators, and trustees, 112 A.L.R. 333.

Note or other obligation payable on demand for an amount in excess of amount actually loaned as usurious, 127 A.L.R. 460.

Finance charge in connection with conditional sale contract as usury, 143 A.L.R. 238.

Usury as affecting conditional sale contract, 152 A.L.R. 598.

Usury as predictable upon transaction in form a sale or exchange of commercial paper or other choses in action, 165 A.L.R. 626.

Retrospective application and effect of statutory provision for interest or changed rate of interest, 4 A.L.R.2d 932; 40 A.L.R.4th 147; 41 A.L.R.4th 694.

Computing interest on basis of 360 days in year, 30 days in month, or the like, as usury, 35 A.L.R.2d 842.

Taking or charging interest in advance as usury, 57 A.L.R.2d 630.

Interest upon arrearages or unpaid accumulations of annuities, 66 A.L.R.2d 857.

Usury as affected by repayment of, or borrower's option to repay, loan before maturity, 75 A.L.R.2d 1265.

What is "compound interest" within meaning of statutes prohibiting the charging of such interest, 10 A.L.R.3d 421.

Advance in price for credit sale as compared with cash sale as usury, 14 A.L.R.3d 1065.

Usury: effect of borrower's agreement to pay, guarantee, or secure some other debt owed to or by lender, 31 A.L.R.3d 763.

Validity and construction of provision (escalator clause) in land contract or mortgage that rate of interest payable shall increase if legal rate is raised, 60 A.L.R.3d 473.

Reformation of usurious contract, 74 A.L.R.3d 1239.

Validity under usury laws of provision calling for repayment of principal which exceeds sum loaned by amount reflecting any decline in purchasing power of dollar, 90 A.L.R.3d 763.

Contingency as to borrower's receipt of money or other property from which loan is to be repaid as rendering loan usurious, 92 A.L.R.3d 623.

Leaving part of loan on deposit with lender as usury, 92 A.L.R.3d 769.

Application of usury laws to transactions characterized as "leases,", 94 A.L.R.3d 640.

Validity and construction of state statute or rule allowing or changing rate of prejudgment interest in tort actions, 40 A.L.R.4th 147.

Retrospective application and effect of state statute or rule allowing interest or changing rate of interest on judgments or verdicts, 41 A.L.R.4th 694.

Propriety of Landlord's Imposition of Fee for Late Payment of Rent, 49 A.L.R.7th Art. 2.

Intentional or Negligent Infliction of Emotional Distress in Aviation Cases Involving Crashes, Hard Landings, or In-Flight Injuries, 49 A.L.R.7th Art. 9.