Usury is the word that defines an abusive practice in the credit market. The legislation regulating it dates back more than one hundred years, specifically, July 23, 1908. Throughout this century, different judgments have been issued that have established jurisprudence on what is considered a usurious loan .
A usurious loan is one that contains abusive practices that refer to excessive interest rates or the obligation of the beneficiary to contract certain financial products that he does not need. These are fraudulent practices that are penalized, but that above all should be avoided.
When is it considered that there is usury in a loan?
In the well-known Law of Repression of Usury, of July 23, 1908, it is established that a loan whose interest rate is excessively above the price of money and completely disproportionate will be considered null. In addition, reference is made to the abuse of power of the financial institution when granting this type of financial products to people who go through an agonizing, exasperating situation, who have limited mental faculties or are not inexperienced in the subject.
Therefore, what is condemned is the abuse of power by the entity. The regulations do not indicate what is the legal limit from which a loan can be considered usurious. In the case of default interest, Law 16/2011 does indicate that it can not be more than 2.5 times the price of money at the time it is granted.
Regarding the remunerated interests, it has been the Supreme Court that has established jurisprudence in this regard. In its ruling of 2015, which established that it is considered usury when the interest on the loan double the average market interest at the time of signing.
It should be noted that it is the Bank of Spain that publishes the average interest rate statistics every month. Based on these figures, the entities fix the price of the money they lend, but adjusting to the line set by the central agency.
However, there are some circumstances in which the financial institution can demand the payment of an interest higher than the market price and that could be considered usurious. However, if there is justified cause, the bank is also entitled to increase the amount of money it lends based on the level of risk it assumes.
The beneficiary of a loan with abusive clauses can file a claim. If the judge considers it usurious, it will declare the contract null. If the credit is canceled, the entity is forced to return the interest it has charged more to its client, who, at the same time, must refund the money received, but without interest.
Tips for hiring fast loans and online loans
1. Review the conditions of the contract
Nowadays, hiring fast loans through the Internet is very common. More and more people are opting for this fast, safe and transparent alternative. One of the main advantages is that the client knows the details of the credit conditions that he will request before beginning the process.
For example, in the Bank page, the beneficiary can choose the offer that most interests him because, at all times, he knows the money that is lent to him, the interest rate and the total amount that he has to return.
2. If the interest of the money price is doubled
At the moment the online credits are contracted, the clients have all the information and can compare the proposal with the statistics of the interest rates published by the Bank of Spain.
Spanish justice considers it abusive to double or triple the interest paid, which is paid to receive the money, without just cause or under normal conditions.
3. Caring for the credit history
If the financial institution considers that it assumes a high risk when granting a loan to a certain client, it may set a higher interest rate. In this case, it would not be considered a user, since the bank defends its interests in the absence of a guarantee provided by the beneficiary.
On many occasions, people who are included in lists of defaulters or who have a high risk credit history, may be forced to pay interest above the average, but can not be disproportionate. It is very important that the client fulfill their obligations and pay their dues in a timely manner to maintain a good credit history that benefits them in each operation.
4. Comparison of offers
Another way to know if the financial institution is establishing leonine conditions is making a comparison . In portals such as Bank you can access different market offers and compare the interest rates of each contract. Thus, the applicant knows in advance which options are the most expensive to avoid them.
5. Review the commissions
In some cases, the interests are adjusted to the market price, but the commissions are excessive. In these cases, it could also be considered that a contract is abusive. It is convenient to read the fine print of the additional costs for processing, early cancellation or the obligation to hire additional services.
6. Request credits online in recognized portals
Given the multitude of offers that exist on the Internet on quick loans , it is more than advisable for the user to search for an offer on a recognized portal. This is the case of Bank , since different recognized and legal financial options can be compared.
7. Use the financial simulator
In addition to reading the fine print, it is interesting to use the financial simulator to know the specific details of the loan.
All these tips allow the beneficiary to know all the conditions and avoid surprises before applying for a loan . Entities that offer financial products must be accredited to lend money and comply with current regulations. It is also the responsibility of the user to be sure of the site where he is asking for money to avoid being a victim of fraud.
Usury can be avoided and there are legal tools to denounce it, since it is penalized.