From the Latin usury, the term usury refers to the interest that someone charges when lending money. In general, the concept refers to the contract that implies the credit and the profit or utility of the same.
However, the notion of usury is closely linked to the excessive interest on a loan and the excessive profit made by the lender. People and entities that charge very high interest rates are classified as usurers. Usury is not a precise economic concept; That is, there is no specific and concrete level that determines when an interest rate becomes excessive. On the contrary, usury is linked to a socially shared notion and the belief that there is a certain price that is fair and that deserves to be paid by the user or consumer.
In ancient times, various cultures considered any interest rate to be usury. For this reason, interest-bearing loans were banned in many regions and for very long periods. In Islam, the condemnation of usury is still in effect. In countries like Saudi Arabia, Pakistan and Iran, there are even banks and financial institutions that provide interest-free loans. On the other hand, in the Western world it is very common to have interest capitalization or anatocism, which is the action of charging interest on the interest derived from a loan. Of course, the definition of usury will depend on the cultural nuance with which it is observed. Laws and Usury Currently, the concept of usury is linked to useless contracts that many individuals have agreed to and that jeopardize their economic well-being. The terms for establishing the relationship with interests are detailed in the legislatures of the country in which it takes place, so that any usurious loan must be prepared taking into account the laws drawn up in the territory and avoiding any type of irregularity that can be condemned. Some situations in which a loan may be considered unacceptable by law are as follows: * when interest is significantly higher and disproportionate to normal;
* when the signature was carried out under conditions considered illegitimate, when, for example, the borrower accepted because he was in a critical situation, had no experience or mental incapacity to make such a decision;
* when the return is required to deliver an amount of money that considerably exceeds the amount borrowed. Today, the concept of usury is often used to refer to what banks put into practice; that is, to the relationships that are established between these and several people, when someone who intends to acquire a property requests a loan from a particular bank.
The agreements established in the contracts tend to be considerably favorable for the referred company to the detriment of the clients’ rights and needs, since many families today are left on the street because they cannot pay the high interest that the mortgage of their homes and, given the default of their payments, the banks proceed to the expropriation, keeping the property. This is a serious problem that is being experienced precisely in Spain, where mortgages have been offered to mansalva in a flourishing period of economy but it is not possible to sustain the same quality of life. On the other hand, las leyes suelen lean in favor of the most powerful, collaborating nefariously with the perjuicio of society.