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FACTS:

 

Four loans were involved in this case. The first loan was  secured by the spouses Medel from Gonzales in the amount of P50,000 wherein P3,000 was withheld by the latter as advance interest.  This was secured by a promissory note. The second loan obtained was for P90,000. The spouses  only received P84,000. The third loan was for P300,000 and this was secured by a real estate mortgage. The spouses failed to pay for the aforementioned three  loans. This was consolidated into one loan in the amount of P500,000. An additional P60,000 was loaned to make the payable P500,000. This was covered with a promissory note containing an acceleration clause. Again the spouses failed to pay. The appellate court modified the interest to be paid by saying that that the interest should be 5.5% per month.  

 

HELD:

The interest was exorbitant, iniquitous, and unconscionable and hence, it contrary to morals, if not the law.  

 

MEDEL V. CA, 299 SCRA 481- Exorbitant, Iniquitous, and Unconscionable Interest