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The Plenary of the Civil Chamber of the Spanish Supreme Court, in its judgment No. 265/2015 of 22 April, has ruled on the unfairness of default interest in loans without mortgage warranty concluded with consumers.

The judgment is based on the doctrine of the Court of Justice of the European Union and states that in the personal loans not secured with a mortgage and concluded with consumers, the general clause which establishes a default interest that exceeds the remunerative interest by more than two percentage points is abusive.

The consequence of this statement of abusiveness is that the loan will bear only a remunerative interest, thus completely eliminating the percentage increase on which the default interest is based.

The judgment states also that in banking contracts concluded with consumers, it is presumed that all the clauses are general conditions of the contract and thus subject to abusiveness control, unless it is dutifully proved the existence of a negotiation and that in such negotiation the consumer obtained some advantage in return.

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