If I took out a loan fora friend and she’s not paying me back, can I also sue her for the interest accumulated on the loan?

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If I took out a loan fora friend and she’s not paying me back, can I also sue her for the interest accumulated on the loan?

Yes I know I made a mistake and now I’m trying to fix it. A friend was in desperate need of help. So I took out a student loan so that I could loan her the money. We agreed that she would pay me back in payments. Now, she’s not paying me back. I plan on taking her to court this year for the money I loaned her. I know I can sue her for the money that I loaned her from my student loan and but If I brought up the interest accumulated, do you think the judge would agree and honor me the loan interest money, as well?

Asked on January 28, 2011 under Bankruptcy Law, South Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If there was an agreement that she would pay interest for you, then--for most loans--it would be enforceable by the court and the borrower would have to pay interest at the agreed upon rate as well as repay the principal. If there was no agreement to pay interest the borrower would not, even if the lender/creditor had to pay interest him- or herself; the borrower is only obligated on what he or she agreed to, even if the creditor ends up losing money on the transaction.

Where there might be a problem and where you need to consult with a lawyer who can research, advise, etc. on this matter before you do anything is this: illegal agreements are not enforceable. Since it's illegal to take out a student loan to give the money to another person, there may be a defense to liability. Moreover, you may be yourself liable for fraud in taking out a student loan in your name for another. Before you open this can of worms, get legal reprsentation.


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