Credit transactions as loan contracts are now part of everyday life for many people. Getting a loan has never been easier than it is today. An appointment with the bank is no longer necessary. Nowadays, getting credit online is almost normal on the Internet. The market offers more offers than ever before. That is why it is important to compare the loan offers. Because usury interest rates are more widespread than expected. However, usury is not always immediately apparent when borrowing.
When does interest count as usury in lending?
As a rule, loan contracts are concluded for a fee. These are usually loan contracts against payment, which can initially be met without legal concerns. To do this, the service agreed in the exchange contract must be in a suitable and striking ratio to the consideration. If this is not the case, we are dealing with usury interest. This occurs as soon as the contractually agreed interest is exorbitantly high, in contrast to the market interest rate:
- The usury interest must be practically 100% higher than the market interest rate
- contracted interest exceeds market interest by at least 12%
The market interest rate is to be understood as the average and representative interest rate to be paid on various capital markets when equity is overloaded.
What can you do if you have already taken out such a loan with usury interest?
If you have already taken out a loan and have determined that it is interest usury, you have the right to withdraw from the contract. The reason for this is that the exemption from interest applies in civil law. However, the latter withdraws if the loan contract violates the borrower’s interests worthy of protection. The contract is therefore null and void according to $ 138 USD. In addition, the lender can be prosecuted if he has exploited the borrower’s predicament. With this objection to the loan contract, he can withdraw from the loan contract. The positive aspect here is that the borrower is not subject to the burden of proof.As a result, he does not have to prove that usury interest actually exists.If you have actually fallen victim to the usury when borrowing, he should invoke the legal consequence of nullity. In this case, the lender must be informed in writing that he is withdrawing from this contract on the basis of this. At this point it is worthwhile to get legal advice if you are uncertain. The resulting costs are eligible for reimbursement if there is actually an interest spur.
Is the borrowing rate or annual percentage rate decisive for usury interest?
The borrowing rate indicates to the borrower the amount of interest he has to pay on the loan taken out. The borrowing rate is bound if its amount is fixed during the credit period. Here it is very important to differentiate between the borrowing rate and the annual percentage rate. In contrast to the annual percentage rate, the borrowing rate is not meaningful in connection with usury rates. To determine whether it is usury when borrowing, the comparison between the annual percentage rate and the market rate is essential.
Debt restructuring can protect against overpriced loans
If you definitely pay too high interest, it is definitely worth taking action. You should first withdraw from the contract and then consider rescheduling. This is the only way to save money. Interest rates have dropped significantly in recent years. With a suitable new loan, it is possible that the overpriced old loan is rescheduled to the current low interest rates. The monthly charge drops significantly and creates financial relief.