Interest Rates in Loan Agreements under Russian Law from the 12th to 17th Centuries

A loan agreement is one of the most significant contracts in the history of domestic legal practice. The foundations of its legal regulation were laid by the Russkaya Pravda. It determined the procedure for charging interest on a loan agreement depending on the term of the contract and its subject matter, while also addressing the issue of interest accrual in instances of the default of the debtor. The 20% annual rate stipulated under the Russkaya Pravda for long-term cash loans in the law of Moscovite Rus remained standard until the middle of the 17th century. However, there were ways to circumvent the regulation regarding the standard interest rate, which can be illustrated by the examples of loans secured by real estate. At the same time, the Moscow state sought to curb the abuses perpetrated by moneylenders. Since the second half of the 16th century, it consistently implemented policies aimed at preventing excessively high returns from interests charged on loan agreements. These restrictions also extended to interests accrued in cases of late fulfillment of loan obligations. As a result, in 1649, nearly a century after the condemnation of interest collection by the Stoglav Council, the Sobornoye Ulozhenie deprived the claims for their recovery of judicial protection.