Usury vs. Interest — What's the Difference?
Edited by Tayyaba Rehman — By Fiza Rafique — Published on October 3, 2023
Usury refers to the unethical or illegal charging of excessive interest, while Interest is the cost of borrowing or the return on an investment.
Difference Between Usury and Interest
Table of Contents
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Key Differences
Usury and Interest are financial terms linked to the lending and borrowing of money, but they convey different connotations and practices. Usury historically represents the act of charging exorbitant or excessive interest rates, particularly when such rates oppress the borrower or are considered unethical by societal or religious standards.
Interest, on the other hand, is a more neutral term, simply denoting the charge for borrowing money or the return on an investment. It serves as compensation to the lender or creditor for the opportunity cost of lending the money. Interest can be simple or compound, fixed or variable, but its essence remains the cost or benefit of money over time.
While all usurious practices involve interest, not all interest is usurious. For instance, a bank might offer a reasonable interest rate on a personal loan, benefiting both the lender and the borrower. However, if a loan shark charges a significantly higher rate intending to exploit the borrower, such practice might be termed as usury.
It's also noteworthy that the definition of usury has evolved over time. In some ancient cultures and religious texts, any form of interest might be labeled usurious. In modern contexts, however, usury is specifically tied to unfair or predatory lending practices, whereas interest is a standard financial tool.
Comparison Chart
Definition
Excessive or unethical interest rates
Cost of borrowing or return on investment
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Connotation
Negative, often associated with exploitation
Neutral, a standard financial term
Legality
Often illegal or frowned upon
Legal unless rates exceed limits set by regulations
Historical Context
In some ancient contexts, any interest was considered usury
Has always been a standard component of finance
Relation to Borrower
Usually detrimental
Can be beneficial or detrimental based on rate and terms
Compare with Definitions
Usury
Interest charged in excess of legal or ethical limits.
The court ruled that the lenders were guilty of usury.
Interest
The return earned on an investment.
She received regular interest from her bonds.
Usury
The act of making unethical profits from loans.
Religious texts in some traditions condemn usury.
Interest
The financial advantage gained from an investment or loan.
The savings account yielded a yearly interest.
Usury
Exorbitant interest that significantly harms the borrower.
The activist campaigned against the usury in payday loans.
Interest
A state of curiosity or concern about or attention to something
An interest in sports.
Usury
The practice of charging unreasonably high interest rates.
Loan sharks often engage in usury.
Interest
Something, such as a quality, subject, or activity, that evokes this mental state
Counts the theater among his interests.
Usury
Exploitative or predatory lending practices.
The new laws aim to protect consumers from usury.
Interest
Often interests Regard for one's own benefit or advantage; self-interest
It is in your best interest to cooperate. She kept her own interests in mind.
Usury
The practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate.
Interest
A right, claim, or legal share
An interest in the new company.
Usury
An excessive or illegally high rate of interest charged on borrowed money.
Interest
Something in which such a right, claim, or share is held
Has interests overseas.
Usury
(Archaic) Interest charged or paid on a loan.
Interest
A person or group of persons holding such a right, claim, or share
A petroleum interest.
Usury
(countable) An exorbitant rate of interest, in excess of any legal rates or at least immorally.
Interest
Involvement with or participation in something
She has an interest in the quality of her education.
Usury
(uncountable) The practice of lending money at such rates.
Interest
A charge for a loan, usually a percentage of the amount loaned.
Usury
The practice of lending money at interest.
Interest
An excess or bonus beyond what is expected or due.
Usury
Profit.
Interest
An interest group.
Usury
A premium or increase paid, or stipulated to be paid, for a loan, as of money; interest.
Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anything that is lent upon usury.
Thou oughtest therefore to have put my money to the exchanges, and then at my coming I should have received mine own with usury.
What he borrows from the ancients, he repays with usury of is own.
Interest
The particular cause supported by an interest group.
Usury
The practice of taking interest.
Usury . . . bringeth the treasure of a realm or state into a few nds.
Interest
To arouse the curiosity or hold the attention of
Your opinions interest me.
Usury
Interest in excess of a legal rate charged to a borrower for the use of money.
Interest
To cause to become involved or concerned with
Tried to interest her in taking a walk.
Usury
An exorbitant or unlawful rate of interest
Interest
(Archaic) To concern or affect.
Usury
The act of lending money at an exorbitant rate of interest
Interest
The price paid for obtaining, or price received for providing, money or goods in a credit transaction, calculated as a fraction of the amount or value of what was borrowed.
Our bank offers borrowers an annual interest of 5%.
Interest
Any excess over and above an exact equivalent
Interest
(uncountable) A great attention and concern from someone or something; intellectual curiosity.
He has a lot of interest in vintage cars.
Interest
(uncountable) Attention that is given to or received from someone or something.
Interest
(countable) An involvement, claim, right, share, stake in or link with a financial, business, or other undertaking or endeavor.
When scientists and doctors write articles and when politicians run for office, they are required in many countries to declare any existing conflicts of interest.
I have business interests in South Africa.
She has an interest in the proceedings, and all stakeholders' interests must be protected.
Interest
(countable) Something or someone one is interested in.
Lexicography is one of my interests.
Victorian furniture is an interest of mine.
The main character's romantic interest will be played by a non-professional actor.
Interest
(uncountable) Condition or quality of exciting concern or being of importance.
Interest
Injury, or compensation for injury; damages.
Interest
The persons interested in any particular business or measure, taken collectively.
The iron interest;
The cotton interest
Interest
To engage the attention of; to awaken interest in; to excite emotion or passion in, in behalf of a person or thing.
It might interest you to learn that others have already tried that approach.
Action films don't really interest me.
Interest
To be concerned with or engaged in; to affect; to concern; to excite.
Interest
(obsolete) To cause or permit to share.
Interest
To engage the attention of; to awaken interest in; to excite emotion or passion in, in behalf of a person or thing; as, the subject did not interest him; to interest one in charitable work.
To love our native country . . . to be interested in its concerns is natural to all men.
A goddess who used to interest herself in marriages.
Interest
To be concerned with or engaged in; to affect; to concern; to excite; - often used impersonally.
Or rather, gracious sir,Create me to this glory, since my causeDoth interest this fair quarrel.
Interest
To cause or permit to share.
The mystical communion of all faithful men is such as maketh every one to be interested in those precious blessings which any one of them receiveth at God's hands.
Interest
Excitement of feeling, whether pleasant or painful, accompanying special attention to some object; concern; a desire to learn more about a topic or engage often in an activity.
So much interest have I in thy sorrow.
Interest
Participation in advantage, profit, and responsibility; share; portion; part; as, an interest in a brewery; he has parted with his interest in the stocks.
Interest
Advantage, personal or general; good, regarded as a selfish benefit; profit; benefit.
Divisions hinder the common interest and public good.
When interest calls of all her sneaking train.
Interest
A fee paid for the use of money; a fee paid for a loan; - usually reckoned as a percentage; as, interest at five per cent per annum on ten thousand dollars.
They have told their money, and let outTheir coin upon large interest.
Interest
Any excess of advantage over and above an exact equivalent for what is given or rendered.
You shall have your desires with interest.
Interest
The persons interested in any particular business or measure, taken collectively; as, the iron interest; the cotton interest.
Interest
A sense of concern with and curiosity about someone or something;
An interest in music
Interest
The power of attracting or holding one's interest (because it is unusual or exciting etc.);
They said nothing of great interest
Primary colors can add interest to a room
Interest
A reason for wanting something done;
For your sake
Died for the sake of his country
In the interest of safety
In the common interest
Interest
A fixed charge for borrowing money; usually a percentage of the amount borrowed;
How much interest do you pay on your mortgage?
Interest
A diversion that occupies one's time and thoughts (usually pleasantly);
Sailing is her favorite pastime
His main pastime is gambling
He counts reading among his interests
They criticized the boy for his limited pursuits
Interest
(law) a right or legal share of something; a financial involvement with something;
They have interests all over the world
A stake in the company's future
Interest
(usually plural) a social group whose members control some field of activity and who have common aims;
The iron interests stepped up production
Interest
Excite the curiosity of; engage the interest of
Interest
Be on the mind of;
I worry about the second Germanic consonant
Interest
Be of importance or consequence;
This matters to me!
Interest
The charge for borrowing money.
The bank offered a 5% interest rate on the loan.
Interest
Compensation to a lender for potential risks.
The high interest was due to his poor credit score.
Interest
A sum added to the principal amount in lending or credit.
The total repayment included both the principal and the interest.
Common Curiosities
Why is interest charged on loans?
Interest compensates lenders for the risk and opportunity cost of lending money.
Can a reasonable interest rate ever be considered usury?
Historically, some cultures or religions viewed any interest as usury, but in modern contexts, usury typically refers to excessive rates.
Can interest be beneficial?
Yes, when earned on investments or deposits, interest can be a source of income or growth.
Is usury always a fixed percentage?
No, usury is context-dependent, and what's considered usurious in one context might not be in another.
How can borrowers avoid usurious loans?
By researching, comparing rates, understanding local laws, and avoiding predatory lenders.
Is all usury illegal?
Not necessarily; the legality of usury depends on local regulations and the defined limits for interest rates.
What determines an interest rate on a loan?
Factors include creditworthiness, loan duration, economic conditions, and lender's policies.
Was interest always accepted in financial practices?
No, various cultures and religions historically opposed any form of interest, labeling it as usury.
Why is usury considered unethical?
It exploits vulnerable borrowers and can trap them in unmanageable debt.
How is interest calculated?
Interest can be simple (calculated only on principal) or compound (calculated on principal and accrued interest).
Why is usury frowned upon?
Usury often exploits borrowers, leading to significant financial harm and perpetuating debt cycles.
Are there controls on interest rates?
Many countries have regulations or usury laws that cap the maximum allowable interest rates.
What's the difference between annual and monthly interest?
Annual interest is calculated yearly, while monthly interest is calculated and applied each month.
Can interest rates be negative?
Yes, in rare economic conditions, central banks or institutions might implement negative interest rates.
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Written by
Fiza RafiqueFiza Rafique is a skilled content writer at AskDifference.com, where she meticulously refines and enhances written pieces. Drawing from her vast editorial expertise, Fiza ensures clarity, accuracy, and precision in every article. Passionate about language, she continually seeks to elevate the quality of content for readers worldwide.
Edited by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
