The Spanish government limits interest rates on consumer loans to prevent "usury"

Madrid"In the last two years we have observed an acceleration of consumer credit by households." The realization that this type of loan is at its "historic high," with year-on-year growth exceeding 10% – according to November 2025 figures – reaching €114 billion – a figure representing around 15% of total household loans – is due to over-indebtedness. The Council of Ministers, in its first meeting of the year this Wednesday, approved it in its first reading. It will still have to pass a second reading before being submitted to Congress for scrutiny.

How does the Spanish government intend to "protect the consumer" and curb "usury"? As explained at a press conference by the Minister of Economy, Carlos Cuerpo, this "comprehensive" reform will limit the interest rates that can be charged for this type of loan and establish greater control and transparency requirements in light of the "profound" changes this market has undergone with the emergence of new players and business models due to digitalization. Regarding the limitation of costs of For loans, the draft bill establishes a general tiered system that the Bank of Spain will update quarterly. The higher the loan amount, the lower the interest rate that can be charged.

For loans of €1,500 or less, the interest rate will be capped at 15%. For loans between €1,500 and €6,000, it will be capped at 10%. For loans exceeding €6,000 with a maturity of less than 8 years, the rate will be capped at 8%, and at 6% for longer terms. Until the decree establishing these tiers comes into effect, a temporary maximum interest rate of 22% is set, applicable to new transactions formalized after the law enters into force. This limit will also apply to credit card transactions. revolving existing.

Transformation of microcredits

Another area of limitation focuses specifically on high-cost loans. These are loans with small amounts, very short repayment periods, and high interest rates. Cuerpo explained that currently there is a regulatory gap for this type of loan, which, although it represents only 0.5% of the total stock at around 500 million euros, affects "almost 10% of total transactions," one million, and is "particularly relevant for lower-income households." "The average high-cost microloan is 300 euros for 30 days. The average cost is 103 euros," said the Minister of Economy. With the new regulations, the maximum cost will be reduced by more than half and "will be 40 euros." With early repayment, it will be reduced to 20 euros.

The way to achieve this reduction is by setting a maximum origination fee of 5% with a limit of 4% monthly interest. Furthermore, the new law eliminates microloans with repayment terms of less than three months. High-cost lenders will also be required to obtain authorization from the Bank of Spain and improve the information they provide to consumers. In their advertising, they will not be allowed to emphasize the ease of obtaining a loan over its cost and type. However, Cuerpo stressed that there is no widespread indebtedness among Spanish households, but rather an overall situation of financial "restructuring" with "isolated cases."