What exactly is usury? At what percentage APR does a loan become usury? Generally, usury has a pretty wide definition which involves an element of unconscionability. In the Quran, for example, usury ("Reba" in Arabic) is condemned harshly while regular money lending with interest ("Fa'eda") is not spoken of. The line between what is permissible and forbidden is never clearly demarcated, but generally a lenient policy toward debtors is favored.
There are currently statutory interest rate caps in the US for every state and the District of Columbia. They vary widely in the interest rates which are considered usury, with some going as low as 5% and others as high as 24% APR.
I think the OP meant any interest at all, and I gotta agree with StillGrowing that there would be no incentive to loan money. Why take on the expense of loan administration, the loss of value from inflation, and the serious risk of default if there isn't some incentive? Some interest rate is necessary simply to cover the expenses. The more important question is one of regulating lending practices to ensure credit is not extended in a way to make a default likely. This may include simply not lending to certain individuals...
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