Legal Question in Credit and Debt Law in India

if no repayment is done..........when is compound interest calculated on promisory note taken for simple interest.........as per INDIAN LAW


Asked on 2/08/15, 1:56 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

08.02.2015

Dear Sir / Madam,

If the promissory note is structured to include a monthly interest rate, repayments will be applied to the interest due first, and the principal (or original amount borrowed) thereafter. If a promissory note isn�t repaid by the due date specified in the promissory note, and if the promissory note does not specifically mention that only simple interest will be levied for any repayment default, the lender has the option of selecting an increased interest rate moving forward.

Regards,

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Answered on 2/08/15, 4:09 am


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