Interest Calculation; Maximum Rate Clause Samples
The "Interest Calculation; Maximum Rate" clause defines how interest is calculated on outstanding amounts and sets a cap on the maximum interest rate that can be charged under the agreement. Typically, this clause outlines the method for computing interest—such as daily or monthly accrual—and specifies that the rate will not exceed the highest rate permitted by applicable law. By establishing a clear formula and a legal ceiling for interest charges, this clause protects both parties from usurious rates and ensures compliance with relevant regulations, thereby reducing the risk of disputes over excessive interest.
Interest Calculation; Maximum Rate. Interest will be calculated based on the actual number of days that principal is outstanding over a year of 360 days. In no event will the effective rate of interest hereunder, inclusive of all fees, charges, and other amounts that are treated as interest under applicable law, exceed the Maximum Rate. Regardless of any other provision of this Note or the other Loan Documents, if for any reason such effective interest rate should exceed the Maximum Rate, such effective interest rate shall be deemed reduced to, and shall be, the Maximum Rate, and (i) the amount which would be excessive interest shall be deemed applied to the reduction of the principal balance of this Note and not to the payment of interest, and (ii) if the loan evidenced by this Note has been or is thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of this Note or the refunding of such excess to be a complete settlement and acquittance thereof.
Interest Calculation; Maximum Rate. Interest will be calculated based on the actual number of days that principal is outstanding over a year of 360 days. In no event will the rate of interest hereunder exceed the maximum rate of interest allowed by applicable law (the “Maximum Rate”). Regardless of any other provision of this Agreement or the other Loan Documents, if for any reason the effective interest rate should exceed the Maximum Rate, the effective interest rate shall be deemed reduced to, and shall be, the Maximum Rate, and (i) the amount which would be excessive interest shall be deemed applied to the reduction of the principal balance of the Obligations owed pursuant to this Agreement and not to the payment of interest, and (ii) if the Term Loans made pursuant to this Agreement have been or are thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of the Term Loans or the refunding of such excess to be a complete settlement and acquittance thereof.