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Can someone charge interest on a personal loan after the fact?

Saint Petersburg, FL |

never signed a contract or agreed to pay interest on the loan and the loan has been paid off. the person is coming back after the fact (bitter) and now says they want to charge me interest on that loan.

Attorney Answers 3


Do you have a receipt that shows the debt was "paid in full" or a $-0- balance. If so, they are out of luck.

Otherwise, you may be out of luck. The law allows a creditor to charge interest on a debt. In the absence of a written agreement, the default interest rate, which in 2010 and 2011 is 6% applies. There is a separate rate for each year that the money was owed.

However, if the facts and circumstances show that the creditor did not seek recovery of interest until LONG after the debt was paid, if the case goes to trial a judge might decide that the creditor waived his/her right to claim interest. So much of this is a fact driven that there is no way without a full consultation for an attorney here on Avvo to give you a more definitive opinion.

I hope you found this response to be of assistance. This response shall not be considered the rendering of legal advise but instead a general response to a general question. While Avvo is a wonderful resource, nothing can be a substitute for an in-depth consultation with an attorney in the jurisdiction in which the law is to be applied. This response shall not be deemed to create an attorney-client relationship, nor shall it create an obligation on the part of the attorney to respond to further inquiry from the questioner.

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In Florida, a verbal contract is binding. However, it is much more difficult to prove than a written contract. The terms of the contract will determine whether interest can be charged. If there was an agreement to pay for interest, and if it can be proven for your oral contract, it will generally be enforceable. However, if your verbal contract did not provide for payment of interest, and if you paid it back under those terms and the other person accepted those payments without any objection, their after-the-fact claim for interest is likely to be unenforceable. And remember, the person who files a lawsuit for breach of contract has the burden of proof to demonstrate with evidence that the contract was breached.

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If you did not agree to pay interest, and the loan is paid off, then the deal is done. If the lender wants to sue you, the burden will be on him/her to prove that interest is owed, and it sounds like this will be diffucult for the lender to prove. Terms of the contract cannot be modified, without consent of the parties. If you are sued, consult with a attorney so that you can properly raise all defenses that are available to you.

I am an attorney who is only licensed in the State of Florida. My answer is general legal advice based upon what I perceive your question to be, and should not be relied upon because every person's facts and circumstances are unique, and because specific laws vary from state to state. To completely evaluate a legal issue requires reviewing and evaluating all relevant facts, applicable laws and other information. My answer does not create an attorney-client relationship, and offered for informational purposes only.

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