Usury

Usury, in law, a payment of interest, by a borrower to a lender (the usurer) for the use of money, in excess of the amount fixed by statute. Legally permitted rates of interest generally vary according to the amount borrowed. Under Islamic law, however, the Koran totally forbids the charging of interest on loans of money.

The charging of different prices for sales on credit or by instalment payments, as compared with sales for cash, does not make a transaction usurious. Service charges incurred in making the loan are likewise not usurious, unless they can be shown to be a disguise for excessive interest. Only in modern times has payment of interest for the use of money been considered a legitimate form of income. The term usury was formerly applied to any kind of interest, and not, as at present, to excessive interest charges.