Legal Definitions - usura manifesta

Usura manifesta is a Latin term that translates to "manifest" or "open usury." It refers to a situation where the charging of excessively high or illegal interest rates on a loan is not hidden or disguised, but is instead clearly evident and undeniable from the terms of the agreement itself.

Here are some examples to illustrate this concept:

• Example 1: Predatory Payday Loan

  A borrower takes out a $300 loan from a lender, who requires a repayment of $450 in just two weeks. The loan agreement explicitly states these figures and the short repayment period. When calculated, this equates to an annual percentage rate (APR) far exceeding legal limits for consumer loans in that jurisdiction.

  This is usura manifesta because the exorbitant cost of borrowing is not concealed. The terms of the loan, clearly laid out in the agreement, openly demonstrate an interest rate that is excessively high and likely illegal, making the usury apparent to anyone reviewing the contract.

• Example 2: Unregulated Personal Loan

  An individual in desperate need of funds borrows $2,000 from an unregulated private lender. The lender demands a repayment of $4,000 within one month, with no complex clauses or hidden fees—just a straightforward demand for double the principal in a very short timeframe. These terms are communicated directly and plainly to the borrower.

  Here, the usury is manifesta because the lender makes no attempt to hide the extremely high and predatory repayment terms. The demand for an unreasonable and excessive return on the loan is clear and undeniable from the outset, openly demonstrating the usurious nature of the transaction.

• Example 3: Business Loan with Extreme Default Clause

  A small business owner secures a loan, and the contract includes a clause stating that if any payment is missed, the interest rate on the entire outstanding balance will immediately escalate from 10% to 200% per annum, effective from the date of default. This clause is written in plain language within the loan agreement.

  This scenario illustrates usura manifesta because the potentially usurious interest rate escalation is explicitly detailed within the loan agreement. The terms that could lead to an excessive and illegal interest charge are openly disclosed within the contract, making the potential for manifest usury evident to anyone reading the document, even if the usurious rate only applies under certain conditions.