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

UPDATED: Aug 13, 2012

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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


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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