Usury rate (determination): revision for loans and overdrafts (September 2024)

Sovereign Order no. 10.831 of 19 September 2024 (JDM no. 8.714 of 27 September 2024) repeals and replaces Article 2 of Sovereign Order no. 2.271 of 6 July 2009 relating to the determination of the usury rate, as amended.

The "average rate charged under the same conditions by lenders acting in good faith" is set at :

— For individuals:

Overdrafts: 13.66% (previously 14.88%)

Personal loans: 4.96% (previously 4.75%)

Property loans: 4.91% (previously 4.01% - Sovereign Order no. 10.062 of 31 July 2023)

— For businesses and sole traders:

Overdrafts: 6.59% (previously 8.36%)

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Penalties for abuse :

Article 357 of the Criminal Code punishes the use of an effective interest rate that is more than half the average rate charged under the same conditions by bona fide lenders for credit transactions involving the same risks as the loan in question, with a fine of between €9,000 and €18,000.

Excessive collections are automatically deducted from the normal interest due on the date of the proceedings and, alternatively, from the principal of the debt.

If the debt is extinguished in terms of capital and interest, the lender will be ordered to repay to the borrower the sums wrongly collected, with interest from the day they were collected.

The usury rate should not be confused with the legal interest rate (set, for all matters, at 5% per annum with effect from 1 February 2024 by Sovereign Order no. 10.337 of 19 January 2024) which is used to calculate interest on sums payable in the event of late payment ordered by a court.

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