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When is default interest too much in a loan agreement? – Houssein v London Credit Ltd [2025]

When is default interest too much in a loan agreement? – Houssein v London Credit Ltd [2025]

The High Court has ruled in Houssein v London Credit Ltd [2025] EWHC 2749 (Ch) that a 4% monthly default interest rate on a property loan was enforceable and not a penalty. The case is a key win for private and non-bank lenders, confirming that strong default clauses can stand if they reflect genuine commercial risk. If you lend secured funds for property deals, make sure your facility or loan agreements are properly drafted and commercially justified. Steven Mather Solicitor advises on facility agreements, loan agreements and secured lending documentation.

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