Common use of Maximum Legal Rate Clause in Contracts

Maximum Legal Rate. The Makers and the Holder do hereby agree that no payment of default interest or other consideration made or agreed to be made by the Makers to the Holder pursuant to this Note shall, at any time, be in excess of the maximum rate of interest permissible by law. In the event such payments of default interest or other consideration provided for in this Note shall result in an effective rate of interest which, for any period of time, is in excess of the limit of the usury or any other law applicable to the indebtedness evidenced hereby, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto be applied to principal immediately upon receipt of such monies by the Holder hereof with the same force and effect as though the Makers had specifically designated such and the Holder had agreed to accept such extra payments as a principal payment, without premium. This provision shall control every other obligation of the Makers and the Holder.