Not everyone is rich enough to buy a costly thing one at a time and thus have to borrow money to fulfil the wish of getting it. My father had borrowed money when he bought a house from SBI bank and now it is all clear. However there are people who tend to get loans from people rather than banks or some other authentic officials as a result of which, they have to pay a heavy amount of money and repaying the debt almost seems impossible.
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Once my uncle came and started crying in front of my father saying that he had borrowed money from a man and now, the interest rate he is claiming is way too high and he is literally failing to clear his debt. I asked my father to define usury to me in simple terms and he said that it is the act of lending money with an interest charge that is way too high than usual. I got to know a few more details about it, so let me share it with you all.
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Is usury illegal?After knowing what is usury, I would say of course it is illegal. One must not take advantage of someone’s misfortune or poor condition. A person faces severe financial ruin and can go even on the verge of giving up his stressful life so such an act can never be legal.
What is the Usurious Loan Act 1918?In India, predatory lending is controlled by the Usurious Loan Act, 1918 whose aim is to protect borrowers from greedy money lenders taking advantage of the borrowers who are in dire need of money and charge excessively high interest rates. This act mainly applies to lending by private properties.
As per Money Lending Act, interest on loans cannot be charged excessively. The normal interest that shall be chargeable shall be within 24% pa.
What is the difference between usury and interest?By now you must have known
what is the meaning of usury and have already got an idea about its difference with interest. If not let me tell you the major difference between the two.
Interest is a percentage fee that one needs to pay to the lender for a loan taken, while usury refers to the act of charging excessive interest rates that are higher than the rates prevalent in the market and is totally unfair to the borrowers.
I hope I have been able to define usury clearly to you all now.
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What is Usury?
Olivia
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1
2 Year
2022-06-21T09:04:21+00:00 2022-06-21T18:03:14+00:00Comment
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