Intrest for personal loan
C.NOWSHAD
(Querist) 13 August 2011
This query is : Resolved
what is the minimum and maximum rate of intrest an individual can levy from the borrower for money lent to the borrower...?
Raj Kumar Makkad
(Expert) 13 August 2011
It depends upon mutual agreement of two individual persons. Law has no interference therein.
C.NOWSHAD
(Querist) 13 August 2011
raj kumar sir... but i heard that an individual can not claim as a financial institution... there are some restriction for that... pls clarify..
Raj Kumar Makkad
(Expert) 13 August 2011
It is true that if a person is engaged in lending money then he is required to be registered under this Act and has to follow all rules and regulations mentioned therein but your query was not raised on this aspect.
Advocate. Arunagiri
(Expert) 13 August 2011
I accept Mr.makkad. Only the registered money lenders need to follow the rules regarding rate of interest.
Individual who gives a hand loan is not bound by it. They can demand interest which was agreed by the borrower at the time of borrowing.
M V Gupta
(Expert) 14 August 2011
I would like to state that although there is no law to limit the interest chargeable by an individual lender under a private contract, it is subject to the provisions of the Usurious Loans Act, 1918. Under Section 3(1) of the Act, the courts are empowered to reopen a transaction if the interest is excessive and that the transaction is as between the parties unfair. The court may reopen any account already taken between the parties and relieve the debtor of all liablity in respect of any excessive interest and if any thing has been paid or allowed in respect of such liability order the creditor to repay any sum which has been received by him excessively.
C.NOWSHAD
(Querist) 14 August 2011
thanks to all... now i clearly understood the position...
