Interest RatesUtah law does not specify an interest rate ceiling, but does have an
"unconsionability" provision (Section 70C-7-106 of the Utah Code). Rates
are determined by the market; in other words, competition and demand determine the
interest rate. Generally, the worse an applicant's credit rating, the higher the
interest rate charged, however some types of loans such as payday loans, post dated check
loans, or "car title loans" tend to have very high interest rates whether the
borrower's credit is good or bad. If you have reasonably good credit, you are nearly
always better off avoiding lenders who offer loans to people with bad credit.
for consumers to have a standard basis for comparing rates, the federal Truth in Lending
Law (Regulation Z) requires disclosure of the interest rate charged as an Annual
Percentage Rate (APR). We recommend that you make use of the information available
to you and compare rates available to you prior to applying for a loan.
The table below illustrates the differences in monthly payments and total interest paid
if $2,000 is borrowed at rates which are available in Utah:
|Annual Percentage Rate
|Total Interest Paid Over 2 Years