Calculation of interest
Reshma K
(Querist) 15 January 2010
This query is : Resolved
How is interest calculated in cases involving money, example recovery of money.
Is the interest calculated from the time I lent money or from the date of filing the case. And also after the judgment if there is still time for the borrower, how is the interest calculated and what rate.
What is commercial rate and when is commercial rate used.
A V Vishal
(Expert) 15 January 2010
How is interest calculated in cases involving money, example recovery of money.
Ans. Interest is charged at normally accepted principle viz diminishing balance method.
Is the interest calculated from the time I lent money or from the date of filing the case. And also after the judgment if there is still time for the borrower, how is the interest calculated and what rate.
Ans. The interest is calculated on diminishing balance method from the date the loan is given. Further if decree is passed in your favour then until the money is fully repaid by the JD. Rate of interest can be 18% PA
B K Raghavendra Rao
(Expert) 15 January 2010
The courts would normally award the contracted rate of interest. Since in your case, the rate of interest is not agreed upon, it would be six per cent per annum from the date of borrowing till the date of filing the case on principal amount. From the date of judgement it would be future interest, that is six per cent per annum on the amount decreed till the date realisation.
