What do usury laws primarily regulate?

Usury laws are designed to protect borrowers by regulating the maximum interest rates that lenders can charge on loans. The underlying principle of these laws is to prevent predatory lending practices and ensure that borrowers are not subjected to excessively high-interest rates that could lead to financial hardship.

By establishing a ceiling on interest rates, usury laws help maintain fairness in borrowing practices, promoting a more equitable lending environment. This regulation is particularly important in consumer lending, where individuals may be vulnerable to exploitation through high costs of borrowing.

The other options, while related to lending practices, do not align with the primary focus of usury laws. These laws do not typically dictate minimum loan amounts or the length of loan terms; rather, they center specifically on limiting the cost of borrowing in terms of interest. Similarly, while they may impact the availability of funding sources, they do not regulate where loans can be funded from. Therefore, understanding that usury laws focus on capping interest rates is crucial for recognizing their role in consumer protection within financial markets.