Usury refers to the exaggerated profit that a lender obtains.
From the Latin usury , the term usury refers to the interest that someone charges when lending money . In a general sense, the concept refers to the contract that implies the credit and the profit or utility thereof.
However, the notion of usury is closely linked to excessive interest on a loan and the excessive profit obtained by the lender . People and entities that charge very high interests are called usurers .
About usury
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, loans with interest were prohibited in many regions and for very long periods of time.
The view on usury varies according to culture.
Cultural differences
In Islam , the condemnation of usury is still very much in force. 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 for interest capitalization or anatocism to exist, which is the action of charging interest on the interest derived from a loan. It is clear that 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 junk contracts that many individuals have entered into and that have put their economic well-being at risk.
The terms for establishing a relationship with interest are detailed in the legislatures of the country in which it is carried out, so that all usurious loans must be prepared taking into account the laws written in the territory and avoiding any type of irregularity that could occur. be condemned.
Some situations in which a loan may be considered unacceptable by law are the following:
* when there is an interest noticeably higher and disproportionate to normal;
* when the signature has been carried out under conditions considered illegitimate , where, for example, the borrower has accepted because he or she is in a critical situation, does not have experience, or is incapable of mental capacity to make said decision;
* when the delivery of an amount of money that considerably exceeds that lent is required as return.
The position of the banks
Nowadays the concept of usury is usually used to refer to what banks put into practice; That is to say, the relationships that are established between these and various individuals, when those who wish to purchase a property request a loan from a certain banking entity.
The agreements established in the contracts tend to be considerably favorable for said company to the detriment of the rights and needs of the clients , thus many families today are left on the street because they cannot pay the high interests that the mortgage of their property entails. their houses and, given their failure to make their payments, the banks proceed to expropriate them, keeping the properties.
This is a serious problem that is being experienced precisely in Spain , where mortgage loans have been offered freely in a flourishing period of economy but the same quality of life can no longer be sustained. On the other hand, laws tend to lean in favor of the most powerful, collaborating nefariously with the detriment of society .