What legal steps can I take if my bank unilaterally increases my interest rates on my loan?
January 19, 2022 | 50,00 EUR | answered by Alwin Reuter
Dear Bank Law Attorney,
I am reaching out to you as I was recently informed by my bank that my credit interest rates have been unilaterally increased. My name is Laura Fritsche and I took out a loan with this bank two years ago to renovate my house. The terms of the loan were very attractive to me at the time, and I have been paying my installments on time and reliably.
However, I have received a letter from the bank stating that due to changing market conditions, my interest rates are being increased. I was shocked and frustrated as I did not expect such an increase, and these additional costs are putting a significant strain on my financial situation.
My concern is that I may not be able to afford the higher interest rates and could end up facing financial difficulties as a result. I feel overlooked by my bank and wonder if this unilateral increase is even legal. What legal steps can I take to challenge this interest rate increase? Are there any ways to reverse or at least minimize the increase?
I would greatly appreciate your expert advice and support on this matter. Thank you in advance for your assistance.
Sincerely,
Laura Fritsche
Dear Mrs. Fritsche,
Thank you for your inquiry regarding the unilateral increase of your credit interest rates by your bank. It is understandable that you are concerned about this unexpected cost increase and are looking for legal options to address it.
Indeed, a unilateral increase of credit interest rates by the bank is not necessarily legal. In principle, the contract between you and the bank is based on the conditions agreed upon at the beginning, which cannot be unilaterally changed. However, there are exceptions that could justify an interest rate increase by the bank. For example, this may be the case if the credit agreement contains clauses that allow the bank to adjust interest rates under certain conditions.
It is important that you carefully review your credit agreement to determine if there are provisions for interest rate adjustments. If this is not the case or if the clauses are unclear, the interest rate increase may potentially be unlawful.
In such a case, I recommend that you first have a conversation with your bank to inquire about the reasons for the interest rate increase. You can also insist that the bank explains the legal basis for the increase. If you are not satisfied with the explanations provided by the bank or if your concerns are not addressed, you may consider taking legal action.
As a lawyer specializing in banking law, I can help you assess your legal options and support you in enforcing your rights. Depending on the circumstances, actions such as filing a lawsuit against the unilateral interest rate increase, initiating an out-of-court arbitration process, or negotiating new terms with the bank may be considered.
It is important that you act promptly and seek legal assistance to protect your interests. I am available for a detailed consultation and will support you in asserting your rights against your bank.
Sincerely,
Alwin Reuter
Lawyer specializing in banking law
