Legal Question in Business Law in California

i have a VERBAL agreement to pay back a personal loan for bills i accrued while waiting for my mother's trust to be settled.

when the trust was settled i took the money and invested it.

the paperwork for the investment states that the person from whom i made the personal loan is to be paid, upon my death, before my beneficiary is to be paid.

NOW, the person from whom i made the loan wants 10% interest from the inception of the loan until the date of my death.

this looks to me that not only will i pay off the loan in interest alone, but will continue giving money until the date of my death.

is this legal ?

thank you.


Asked on 8/02/09, 8:09 pm

1 Answer from Attorneys
Nina Ortega

It is perfectly legal, reasonable and fair. You can avoid the accrual of future interest by paying the loan now.

Remember that a dollar saved is a dollar earned. Paying the loan now *saves* you interest at the rate of 10% per annum. If your investments are not consistently earning at least 10% per annum plus enough to pay the taxes on those earnings, then you are better of paying the loan now.

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Answered on 8/02/09, 8:58 pm


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