Is it legal to lend money with interest? DR, Colombia, Mexico and Peru

Yes, lending money with interest is legal in the Dominican Republic, Colombia, Mexico and Peru, as long as you stay under the cap each one sets, or does not set. That "or does not set" is not a gap in this article: it is exactly the situation in two of the four countries. Regulation ranges from a daily figure published by the central bank to a legal gap a court just ordered lawmakers to fill. Here is each case, with its source and its date.

Updated as of 15 July 2026. The figures in this article, especially Colombia's and Peru's, are recalculated periodically by the relevant authority. Before you set your rate, check the current figure at the official source linked in each section: this article is a guide, not a substitute for that check or for legal advice.

What all four countries have in common

In none of the four is it prohibited to lend money with interest between individuals. What varies is how it is limited: some set a number that gets recalculated (Colombia, Peru), others leave the decision to a judge case by case (Mexico), and one is, literally this week, in the middle of changing the rules (Dominican Republic). None of the four requires a private individual to register as a financial entity to lend occasionally; lending habitually and as a main activity is a different story, and that is where it is worth checking whether your activity crosses that line.

Dominican Republic: no cap in force, mid-change

This is the most unusual case of the four, and the one that needs the closest watching for the rest of 2026.

Since 2002, Law 183-02 repealed the sanction against usury that had existed since 1919 (Executive Order 312): charging an abusive interest rate between individuals stopped carrying a criminal consequence. In practice, that is what has let informal credit operate without a clear legal ceiling for more than two decades.

That changed on 5 May 2026, when the Constitutional Court issued ruling TC/0235/26: it declared the repeal of those sanctions unconstitutional and directed Congress to legislate a new framework against usury, for both the formal and informal markets. Two days later, on 7 May, Senator Eduard Espiritusanto filed a bill to regulate usury in both markets.

As of this update, that bill is still going through the legislative process and there is no numerical cap in force yet for loans between individuals. That is why this article does not give you a Dominican figure: there is not a verifiable one, today. What you can count on is that the trend is towards stricter regulation, not looser, so setting a rate "because nothing has ever happened" is a bet that looks riskier by the week.

Sources: ruling TC/0235/26, coverage by Diario Libre and analysis by El Nuevo Diario.

Colombia: the usury rate is published every month

Colombia is the clearest case of the four. Article 305 of the Criminal Code criminalises usury: charging, on any money loan (including between individuals, not just banks), interest above 1.5 times the current banking interest rate certified by the Financial Superintendency is a crime, punishable by 32 to 90 months in prison plus a fine.

The Financial Superintendency certifies the current banking interest rate, and with it the usury rate, every month. For July 2026, the usury rate for the consumer/ordinary modality was 28.79% effective annual (over a current banking rate of 19.19% EA). There are different modalities depending on the type of credit (low-amount consumer, productive, popular), each with its own cap.

This means two practical things if you lend in Colombia: the cap moves month to month, so you cannot set a rate once and forget about it; and exceeding it is not an administrative infraction, it is a criminal offence.

Sources: Financial Superintendency certification, July 2026 (La República) and Criminal Code, Article 305.

Mexico: no fixed federal cap, case-by-case judicial decision

Mexico is the one country of the four with no national figure to cite, and that is not a gap in this article: it is the real state of federal law.

The Federal Civil Code, in Article 2395, does not set a maximum percentage. What it says is that if the agreed interest is "notoriously disproportionate" to normal practice in similar transactions, and suggests abuse of the debtor's need, inexperience or ignorance, the debtor can ask a judge to reduce it. It is a judicial decision, case by case, not a percentage published in advance. The reference legal interest rate (which applies when the parties did not agree on one) is 9% annual, but it is a reference floor, not a ceiling for conventional interest.

Some Mexican states have their own criminal usury provisions, with criteria that vary from one state criminal code to another. Since it is not a single national number, and verifying it state by state is beyond what this article can confirm against a single primary source, the concrete recommendation is: if you lend in Mexico, check your state's criminal code in addition to the Federal Civil Code, and do not assume "no cap" means "any rate is safe": judicial discretion is still there.

Source: Federal Civil Code, Article 2395 (Justia Mexico).

Peru: the central bank publishes the cap every day

Peru is the only one of the four with a cap that applies specifically to loans between individuals, not just banks: the Central Reserve Bank (BCRP) sets the maximum conventional compensatory interest rate for operations between persons outside the financial system, and updates it daily on its official site.

Checking the source on 15 July 2026, that rate stood at 114.13% annual in national currency. It is a number that changes daily, so do not memorise it: check the BCRP's official page before you set your rate, every time you adjust it.

Charging above that cap is usury and is criminalised under Article 214 of the Criminal Code (Legislative Decree 635). In addition, if the loan falls into arrears, the default interest you can charge has its own limit: 15% of the current compensatory rate, on top of it.

Source: BCRP, maximum compensatory interest rates.

Comparison summary

What to do before you set your rate, whatever your country

1. Look up the current figure or criterion at the official source for your country (the ones above, or your country's equivalent if it is not on this list), never on a forum or from what another lender charges.
2. Check whether the cap applies to the nominal or the effective rate: in several countries it is calculated on the effective one, and a "low" nominal rate can turn into a very high effective one (see How much interest to charge for lending money).
3. If your country recalculates the cap periodically (Colombia, Peru), check it again every time you adjust your rate: do not set it once and forget it.
4. Always put the rate (and the default interest, if it applies) in writing, in the contract. See Promissory notes and loan contracts.
5. If you have real doubts about your case, consult a local lawyer: this article explains the general framework, it does not replace advice on your specific situation.

Frequently asked questions

Can I lend money without registering as a company? In all four countries, lending occasionally between individuals generally does not require registration. Lending habitually, as a main activity and at volume, is a different story and may require registration or a licence depending on your country; check with the local financial authority.

Do these figures apply the same way if I lend in dollars? Not necessarily. Peru, for example, publishes a different cap for national currency and foreign currency. Always check the figure that matches the currency you lend in, at the official source.

What happens if I already charged above the cap without knowing? It varies by country, but in several of these jurisdictions the excess charged can be credited against the principal or the debtor can demand it back, on top of criminal liability if it applies. Correct the rate going forward immediately and, if the amount is significant, consult a lawyer about your specific case.

Summary

• Lending with interest is legal in all four countries; what changes is how it is limited.
• Colombia and Peru publish a numerical cap that gets recalculated (monthly and daily, respectively) and applies expressly to loans between individuals.
• Mexico has no fixed federal cap: a judge reduces "notoriously disproportionate" interest case by case.
• The Dominican Republic has no cap in force today, and is in the middle of a reform a court ordered after the May 2026 TC/0235/26 ruling.
• Always check the official source before setting your rate: the figures above change.

Prestafolio lets you record the rate, the default interest and generate the promissory note for every loan from the app, so it is all in writing as this article recommends: see Generate a promissory note and Setting the arrears rate.