Woman attempts legal action over 20% home loan interest rate
A woman from Co Clare in Ireland has launched a legal bid after she was charged an interest rate of almost 20% on a sub-prime loan secured on her home.
She claimed the rate was “unconscionable and oppressive”.
The short term-loan was reportedly taken out with lender Secured Property Loans Limited in 2008. She will ask the High Court to prevent SPL from repossessing her property due to the loan representing “an unconscionable bargain“.
The Independent describe the test case as just one in a series of legal actions from borrowers who could not get loans from mainstream banks and claim they were charged extremely high interest rates by bad credit loan lenders.
The woman in the test case borrowed €125,000 over a 12 month period at an APR interest rate of 19.41%, which was secured on a pub which also her home, in Co. Clare.
The Independent reports that Ron Weisz, secretary and director of SPL said:
“We tell borrowers that if the interest rate, which is fully explained, is too high for them, they should not apply for or consent to a loan,”
“We also insist that borrowers get independent legal advice. Our service is very personal. We are not a bank and we do not take deposits. We only lend money secured on property.”