Consumer credits and personal loans

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DO I HAVE AN ABUSIVE CREDIT OR LOAN?

Consumer loans or abusive loans?

Really the “abusive interests", which we colloquially call that, are usurious interests and the Law to be applied on Usury is the Law of repression of Usury of 1908. This law declares void “the interest noticeably higher than the normal amount of money and manifestly disproportionate”. One of the arguments that banks used to excuse themselves from this practice was the consent of the consumer, who, by signing the loan contract, was accepting its conditions.

 

Well, given the distressing situation in which you found yourself when signing or your completely normal inexperience, the acceptance of the contract is flawed, and even more so if the bank deceived you or misled you into believing conditions that they were not.

Supreme Court ruling of November 25, 2015. It is the ruling that protects many of the Spaniards who have already sued the abuse of their personal credits, to whom the usurious interests, manifestly disproportionate to the circumstances of the case. Furthermore, the financial company cannot justify the concurrence of circumstances that support excessive interest, it can only claim the consent of the consumer, which has already been ruled, with the protection of justice, not to be a valid expression of will.

To assess whether the interest is higher than the normal interest of money, You must compare the APR set in the operation and the average interest of consumer loans, on the date you arranged it. Note that the percentage of the APR (Equivalent annual rate), is calculated taking legally predetermined rates and based on the “expenses” that the borrower simply has to pay for the loan.

And above all! The APR percentage is NOT nominal. With this percentage we can know if the interest they have been charging us is noticeably higher than normal money. In no case should you compare it with the nominal interest.

The Bank of Spain has provided the Bank of Spain calculator, with which you can do these simple operations. The APR must be provided to you by the bank if it has not already done so. They have the obligation to do so based on the “transparency” that is legally required of them, especially with regard to the user's right to compare their loan offer and that of other banks. ad

WHY SARCE LAWYERS?

WHY CAN I COMPLAIN?

Abusive interests are claimed by resorting to Usury Repression Law, also called Azcarate Law, which estimates the nullity of all those contracts in which usury exists. And this can be applied to any type of loan, regardless of the amount, the entity or the client, as long as the interest exceeds the normal interest on money, as we mentioned in the previous section. 

 

Now, on paper this sounds great, but… How is the Azcarate Law? Well, we are going to tell you the two practical cases in which it would be possible to apply it:

 

  1. You may have realized reading this post that The default interest on your loan is abusive. In this case, you are still paying it, so if you go to court and they rule in your favor, you will have to return the initial amount of money requested to the bank, without any interest. Continuing with the example that we gave you at the beginning of the article: if you request 1,000 euros, you return 1,000 euros, nothing more. Because the entity would earn the rest of the money illegally. 
  2. If you finished paying your loan a long time ago but it is now that you have realized that you paid much more money for your loan than it really deserved, you still have time to resort to the Usury Repression Law. How will it work in this case? Well, the bank will be forced to return all the extra money you paid in interest. Or what is the same: if you requested 1,000 euros and had to return 700 as interest rate, these 700 will be returned to you in accordance with previous rulings against usury.