Question: Two years ago, I took a loan from the bank and was paying the installments regularly, but now it has become clear to me that the bank has raised the interest rate agreed upon in the loan contract. Does the bank have the legal right to raise the agreed upon interest rate? I have stopped paying installments since two months, and the bank is currently in the process of filing a lawsuit against me.
What is the appropriate action I can take against the bank? Should I file a civil lawsuit against the bank? If the lawsuit is filed, will the bank interest stop being calculated? Please advise.
Answer: The bank doesn’t have the right to raise the interest rate without your consent unless agreed upon in the loan agreement. Such an act from the bank is considered as amending the agreement from one side which is not accepted by law, because if the contract is valid and binding, according to Article 267 of the Civil Transactions Law, none of the contracting parties may revoke, modify or cancel it except by mutual consent, order of the court or a law provision.
In bilateral contracts, if one of the parties does not perform his contractual obligations, the other party may, after serving a formal notification to the debtor, demand the performance of the contract or its termination which means that you have the right to initially file a case to terminate the loan agreement on the basis that the bank violated the contract or you might file a counterclaim when the bank takes the step and starts the case.
The bank’s interest will stop if the lawsuit is filed but it doesn’t mean that the court will not decide the legal delay interest which is another type of interests the court might judge from the date the case is filed until the date of full payment.
