Is it legal for me to lend someone money and make interest on the loan?

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Is it legal for me to lend someone money and make interest on the loan?

I lent an acquaintance $2,000 and had her sign a document stating that she promised to pay me back. Now she is refusing to do so and is threatening me because we had verbally agreed to some compensation on the loan although i am only claiming the original $2000 back.

Asked on August 13, 2012 under Bankruptcy Law, New York

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Under the laws of all states in this coutnry, one can loan a person money and receive some form of interest back on it as interest on the loan. The issue is that all states have limits on the maximum amount of interest that can be allowed. If you have no agreed upon ineterst on the loan, the laws of all states imply a reasonable rate of interest.


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