Countries › Paraguay › Guide › 10. Capital markets and finance › Interest rates, usury and credit cards in Paraguay: freely agreed rates, the 30 percent usury margin, default and penalty interest, card caps and foreign currency loans

Interest rates, usury and credit cards in Paraguay: freely agreed rates, the 30 percent usury margin, default and penalty interest, card caps and foreign currency loans

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Last verified: 2026-10-28 · Status: Stable

Paraguay lets lenders and borrowers agree interest freely, in guaraníes or foreign currency, but treats as usurious any compensatory or penalty rate whose effective rate exceeds by 30 percent the average effective consumer loan rate of banks and finance companies, published monthly by the Banco Central del Paraguay (BCP) by term and currency. Default interest cannot exceed the agreed rate, penalty interest cannot exceed 30 percent of the default rate and interest may never be capitalized on default or penalty interest. Credit card interest is capped at three times the average market deposit rate, card penalty charges must be approved by the BCP in advance, and obligations in foreign currency are valid and enforceable in the agreed currency.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026. Fines tied to the minimum wage use PYG 3,044,000 per month and PYG 117,077 per daily jornal, in force from 1 July 2026 under Resolución MTESS Nº 670/2026. Conversions are for orientation only.

Key facts

Usury ceiling	Effective rate more than 30% above the BCP average effective consumer loan rate of banks and finance companies, by term and currency Ley 489/95 art. 44 as reworded by Ley 2339/2003, as of 2026-10-28 · in force
Margin over the BCP average consumer rate that makes a rate usurious	30 %Ley 489/95 art. 44, as of 2026-10-28 · in force
Maximum default (moratory) interest	The originally agreed rate Ley 489/95 art. 44, as of 2026-10-28 · in force
Maximum punitive interest	30 % of the moratory rateLey 489/95 art. 44, as of 2026-10-28 · in force
Capitalization of default or penalty interest allowed	No Ley 489/95 art. 44, as of 2026-10-28 · in force
Credit card interest cap	3 times the average market deposit rate Ley 5476/2015 art. 9, as of 2026-10-28 · in force
Card user's right to withdraw after signing	7 daysLey 5476/2015 art. 6, as of 2026-10-28 · in force
Foreign currency obligations enforceable in the agreed currency	Yes Ley 434/94 art. 1, as of 2026-10-28 · in force

The rule

1. Free rates within a usury ceiling. Compensatory interest on lending and deposit operations, in local or foreign currency, is set freely by supply and demand within the limits of the article. Compensatory and penalty rates are usurious when their effective rate exceeds by 30 percent the average effective annual rate charged by banks and finance companies on consumer credit, for the same terms and currencies. The BCP defines consumer credit and the terms and currencies used, and publishes the rates monthly in two national newspapers.
Cost to do it: No fee; lenders must track the BCP monthly average for the relevant term and currency.
Example: If the BCP average effective consumer rate for a given term in guaraníes were 20 percent, any effective rate above 26 percent for that term would be usurious (illustrative average, not a published figure). / The same logic applies separately to US dollar loans, against the BCP average for dollar consumer credit of that term.Ley Nº 489/95 Orgánica del Banco Central del Paraguay, art. 44 as reworded by Ley Nº 2339/2003, Ley 489/95 art. 44, 2003-12-26 official text · verified 2026-10-28 · changed: Ley 2339/2003, promulgated 26 December 2003 and published 12 January 2004, reworded art. 44 of the BCP charter to set the 30 percent margin over the average consumer rate.

2. Default and penalty interest. From default, compensatory interest becomes default (moratory) interest at a rate not higher than the originally agreed rate, computed on the overdue balance. Lenders may add penalty (punitive) interest of no more than 30 percent of the default rate, also only on the overdue balance. Interest may never be capitalized on default or penalty interest.
Cost to do it: Maximum total charge on an overdue balance: agreed rate plus 30 percent of it, subject to the usury ceiling.
Example: On a loan at 18 percent, the default rate cannot exceed 18 percent and the penalty rate cannot exceed 5.4 percent, so the overdue balance bears at most 23.4 percent. / On US$100,000 overdue for one year at 9 percent agreed, the maximum is US$9,000 default interest plus US$2,700 penalty interest, with no interest on that interest.Ley Nº 489/95, art. 44 as reworded by Ley Nº 2339/2003, Ley 489/95 art. 44, 2003-12-26 official text · verified 2026-10-28

3. Credit and debit cards. Card interest must follow the specific laws and regulations and cannot exceed three times the average market deposit (passive) rates. Penalties and other charges for late payment or breach must be reasonable and proportional to the cost caused and approved by the BCP before use; issuers applying unapproved charges must refund them. The BCP regulates the maximum merchant commissions of card operators and issuers. Users may withdraw within 7 days of signing, prepay at any time with a proportional cut in interest and no penalty, cancel the card without paying the whole balance at once, and are not charged for over limit transactions they did not approve; merchants and issuers may not set minimum amounts for card payments or surcharge card payments. The authorities are SEDECO, the BCP and INCOOP within their competences, and fines run from 10 to 300 day fines, each worth at least 20 percent of a daily minimum wage.
Cost to do it: Day fine floor: 20 percent of the PYG 117,077 jornal, PYG 23,415; minimum fine of 10 day fines from about PYG 234,154 (US$40).
Example: A store in Asunción cannot charge 3 percent extra for paying by card or refuse card payment below PYG 50,000. / If the average deposit rate were 6 percent, card interest could not exceed 18 percent (illustrative average).Ley Nº 5476/2015 De transparencia y defensa al usuario en la utilización de tarjetas de crédito y débito, Art. 4, 6, 8, 9, 10, 12 to 14, 20 and 22, 2015-08-25 official text · verified 2026-10-28

4. Foreign currency obligations. Juridical acts, obligations and contracts in foreign currency are valid and enforceable in the agreed currency. They may be secured by registered pledges, mortgages, warrants or other guarantees for the amount in that currency, registered showing the amount of the obligation and the guarantee. In creditor arrangements they are converted provisionally into guaraníes for the creditors' meeting and finally at the selling rate on the payment date, and in bankruptcy at the selling rate on the date of the declaration; foreign currency debts in credit instruments, including enforceable bank current account balance certificates, can be claimed in executive proceedings, and attachments are recorded in the currency of the obligation. Supervised institutions must report credit operations contracted abroad to the BCP, except ordinary banking operations.
Cost to do it: No fee; registration costs of the guarantee as for any pledge or mortgage.
Example: A US dollar loan agreement between two Paraguayan companies is enforceable in dollars, and its mortgage is registered for the dollar amount. / In a borrower's bankruptcy, a US$1 million claim is converted at the selling rate on the date of the bankruptcy declaration, so the creditor bears currency moves after that date.Ley Nº 434/94 Obligaciones en Moneda Extranjera, Art. 1 to 6, 1994-10-10 official text · verified 2026-10-28

Charge	Limit	Norm
Compensatory interest	Free, but usurious above BCP average consumer rate plus 30%	Ley 489/95 art. 44
Default interest	Not above the agreed rate, on overdue balance only	Ley 489/95 art. 44
Penalty interest	Not above 30% of the default rate	Ley 489/95 art. 44
Interest on interest	Prohibited on default and penalty interest	Ley 489/95 art. 44
Credit card interest	Not above 3 times the average deposit rate	Ley 5476/2015 art. 9
Card penalty charges	Approved by the BCP in advance	Ley 5476/2015 art. 8
Foreign currency loans	Valid and enforceable in the agreed currency	Ley 434/94 art. 1

Interest limits at a glance

Worked example

A PYG 500,000,000 (about US$85,203) working capital loan at an agreed 16 percent a year falls six months overdue on the full balance: default interest is capped at 16 percent, PYG 40,000,000 for the half year, and penalty interest at 30 percent of that rate (4.8 percent a year), PYG 12,000,000, for a total of PYG 52,000,000 (about US$8,861), with no compounding (Ley 489/95 art. 44). The lender must also check that 16 percent plus the penalty rate, in effective terms, does not exceed by 30 percent the BCP's published average for consumer credit of that term.

Step by step

1. Obtain the BCP monthly average effective consumer rate for the term and currency of the loan and price below that average plus 30 percent.
2. Draft default and penalty clauses within the agreed rate and 30 percent of it, without capitalization.
3. For card products, file penalty and charge schedules with the BCP before use and keep rates within three times the average deposit rate.
4. For foreign currency loans, state the currency in the guarantee registration and report foreign borrowing by supervised entities to the BCP.
5. Review cross border loans for withholding tax on interest (see the INR page).

Common traps

The usury benchmark is the BCP average for consumer credit of the same term and currency, even when the loan is commercial; check short term business loans against it and confirm with counsel whether a specific non bank lender falls within art. 44.
Default interest above the agreed rate is not enforceable as written, a common mistake in templates copied from other jurisdictions.
Surcharging card payments or setting minimum card amounts is prohibited for merchants as well as issuers (Ley 5476/2015 art. 20).
In bankruptcy the conversion rate is fixed at the declaration date, so foreign currency creditors lose protection against later depreciation (Ley 434/94 art. 3).
The BCP's monthly rate tables were not reachable from official pages during verification; take the figure from the BCP's own publication for each loan.

Sources

← Brokers, exchanges, depositories, clearing houses and rating agencies in Paraguay under the 2025 securities lawSecured lending and collateral in Paraguay: registered pledges, open pledges, mortgages for banks, foreign currency security and pledges over book entry securities →

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