What term describes interest charged in excess of the legal limit set by state law?

The term that describes interest charged in excess of the legal limit set by state law is usury. Usury laws are designed to protect consumers from excessively high-interest rates and to ensure fair lending practices. When a lender charges interest that exceeds the legal maximum established by state regulations, that practice is classified as usury. It is important for both lenders and borrowers to understand these laws, as usurious rates can lead to legal repercussions for lenders and can also put borrowers in a financially precarious situation.

The other terms do not relate to the context of interest rates and lending practices. For example, abandonment typically refers to a property being left unoccupied or abandoned, while abatement often pertains to a reduction or lessening of something, such as a tax or fee. A funding fee is associated with specific loan programs, particularly in the context of VA loans, and refers to a charge that helps reduce the loan's cost to taxpayers. Understanding these distinctions is important for comprehensively grasping concepts in mortgage lending.