Legal Caps on Interest Rates

Legal caps on interest rates are regulations set by governments to limit the maximum interest rate lenders can charge borrowers. These caps aim to protect consumers from excessively high rates that can lead to financial hardship and predatory lending practices. By establishing a maximum allowable rate, these laws help ensure that borrowing remains fair and accessible, particularly for vulnerable individuals. In essence, they act as a safeguard against exploitation in the lending market, promoting responsible lending and borrowing practices while supporting financial stability.