Money borrowed at heavy interest

My grandmother borrowed loans from a neighbour o for my fathers business. The lady charged 10% per month as interest. When we were not able to pay the interest due to business losses after two years the lady made her get another loan to pay the interest. This got accumulated to around 10 laks over years and we are unable to pay the interest now. She was also made to join the chit fund that this lady ran to pay off the debts. We told her we would pay the principal amount as 1 lakh at a time when we would get money. The matured amount from the chits and other money which we gave for paying off the principal she started reducing it from interest rather than the principal as accepted. Every day she is now calling my grandmother for atleast 10 times and verbally abuse her. She is demanding 30 lakhs back with the principal and the interest. Grandma is a pensioner and gets 7000 pm she is paying the interest 16000 for two loans regularly till date with our help. She always calls her up to come and meet her daily at a park or on road and shout at her. Recently the ladys husband and daughter in law are also calling up and torture her mentally. We have already paid more than twice of the principal as interest so far. She does not have any agreements drawn and signed for this. But we have given one cheque two years back for one lakh as security. She is threatening to come to our home with goons if we do not pay up the money immediately. Kindly advise