Usurious Loans and Unfair Terms in Spain: Azcárate Law, APR and Nullity Action (2026)

Usury and Unfair Terms in Loans: A Dual Legal Framework

In Spain, loans with excessive interest rates are governed by two parallel systems:

1. The Act of 23 July 1908 on the Suppression of Usury (Ley Azcárate), applicable to all types of loans
2. The TRLGDCU (Royal Legislative Decree 1/2007) (Consolidated Text of the General Consumer and User Protection Act) and Directive 93/13/EEC: governing unfair terms in B2C contracts

The Ley Azcárate: Usurious Loans

The Concept of Usury (Art. 1 Ley Azcárate)

A loan agreement is null and void if it stipulates an interest rate that is notably higher than the normal market rate and manifestly disproportionate to the circumstances of the case, or if it is entered into on terms so one-sided as to be unconscionable.

The Act does not require both conditions to be met simultaneously: it is sufficient that the interest rate be notably higher than the normal market rate at the time the contract was entered into.

Supreme Court Doctrine: Comparative APR

The Tribunal Supremo (Supreme Court) has developed a precise body of doctrine on when an interest rate constitutes usury:

STS 628/2015 (25 November 2015): The landmark ruling. It declared a revolving credit facility at 24.6% APR usurious when the average market rate for similar transactions was 10%. The reference benchmark is the average rate for consumer credit transactions published by the Banco de España (Bank of Spain).

STS 149/2020 (4 March 2020): Full Chamber ruling. It established that the comparative benchmark for revolving loans is the average interest rate for credit cards and revolving credit (not the general consumer loan rate). At that time, the average was approximately 20%, and accordingly, the 26.82% APR at issue was held to be notably higher. This ruling triggered thousands of claims.

STS 367/2022 (4 May 2022): This decisión refined the doctrine, clarifying that where the average market rate for revolving credit cards is already high (around 19–20%), exceeding that level by an appreciable margin (6+ percentage points) continues to constitute usury.

Consequences of Nullity (Art. 3 Ley Azcárate)

Once a loan is declared usurious, it is null and void: the borrower is only obliged to repay the principal received, with no interest of any kind. Furthermore, if the borrower has already paid usurious interest, they are entitled to restitution of any amounts wrongly paid.

Judicial moderation does not apply, the nullity is absolute and total (STS Full Chamber, 25 November 2015).

Limitation periods: The action for nullity on grounds of usury is imprescriptible under the prevailing doctrine (an absolute nullity cannot be subject to a limitation period). The action for restitution of amounts wrongly collected is subject to a five-year limitation period.

Unfair Terms in Mortgage Loans

Act 5/2019, of 15 March, regulating mortgage credit agreements (LCCI; Ley de Contratos de Crédito Inmobiliario), transposed Directive 2014/17/EU and established rules for residential mortgage lending:

Key Terms Declared Unfair by the Supreme Court

1. Floor clause (cláusula suelo: a minimum interest rate floor in variable-rate mortgages): unfair if not disclosed with adequate substantive transparency (CJEU, Case C-26/13, Kásler; STS Full Chamber, 9 May 2013). Nullity + restitution from 9 May 2013 onwards (the temporal limitation was itself declared void by CJEU Case C-154/15, which established full retroactivity from the date of signing)

1. IRPH as a reference index (Índice de Referencia de Préstamos Hipotecarios: the Spanish mortgage loan reference index): not inherently unfair (CJEU, Case C-125/18, Gómez del Moral: the IRPH is an official, transparent index), but may be so if the lender failed to provide sufficient comparative information for the consumer to understand the true cost

1. Acceleration clause (vencimiento anticipado): a clause allowing the bank to call in the loan upon any missed payment is unfair (CJEU, Case C-70/17); the LCCI 2019 requires at least 12 months of arrears before acceleration is permitted on a primary residence

1. Mortgage arrangement costs (gastos hipotecarios): the Supreme Court (STS Full Chamber rulings of 2019 and 2023) allocated costs as follows: stamp duty (IAJD, Impuesto sobre Actos Jurídicos Documentados) → lender; valuation → lender; agency fees → 50/50; notary fees → 50/50; land registry → lender. Claims for restitution are subject to a five-year limitation period running from the date of signing (2023 standard following post-ECtHR judgments)

Procedure for Challenging Unfair Terms

1. Pre-litigation complaint to the bank (advisable to interrupt the limitation period)
2. Claim before the Tribunal de Instancia (court of first instance), under ordinary or expedited proceedings depending on the amount in dispute
3. The court may declare the term null and void and order restitution of amounts wrongly collected, plus statutory interest

Specialist courts: Tribunales de Instancia (courts of first instance) specialising in unfair contractual terms; established by Royal Decree-Law 1/2017: handle the highest-volume cases.

Conclusion

A lawyer advising on usurious loans must compare the contract's APR against the Banco de España's average rate for the relevant product category (revolving, personal, or mortgage) at the time of contracting. If the usury threshold is exceeded, the nullity is total and the client owes only the principal. Regarding unfair terms in mortgage contracts, the allocation of arrangement costs and the retroactivity of floor clauses continue to generate active litigation.

Lexiel enables practitioners to search Supreme Court and CJEU case law on usury and unfair terms, and to draft nullity claims with verified citations.