Under Article 7 of the Real Estate Law, when is interest on a loan not permitted to be charged?

The answer indicates that interest on a loan is not permitted to be charged under conditions of excessive charges, which aligns with the protections laid out in Article 7 of the Real Estate Law. This provision is designed to protect borrowers from being subjected to unreasonable or predatory lending practices, ensuring that the interest rates and related charges remain within reasonable limits.

The law aims to promote fairness in lending, which includes preventing lenders from imposing exorbitant interest rates that could potentially lead to financial distress for borrowers. In essence, if any charges—including interest—are deemed excessive, they are not permissible under this regulation.

Understanding this law highlights the balance intended between protecting consumers while allowing lenders to operate within a lawful framework. The provisions surrounding excessive charges are in place to foster an equitable lending environment and safeguard the interests of borrowers, particularly in residential real estate transactions where the risk of excessive financial burden can be greatly pronounced.