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

Asked about 3 years ago - 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)

  1. Taras S. Rudnitsky

    Contributor Level 11

    1

    Lawyer agrees

    Answered . 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.

  2. Jeffrey B. Lampert

    Pro

    Contributor Level 19

    Answered . 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... more
  3. Dana L. Manner

    Contributor Level 15

    Answered . 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... more

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