Legal Question in Credit and Debt Law in New York

Interest on a loan

I was given a loan by the company I used to work for. The loan was made on 9 May 2006. In August 2006 the company asked me to sign a loan agreement, in that agreement they decided to add a rate of interest on the outstanding amount. They said if I didn't agree then they would ask for the full amount back immediately.

Are they allowed to put an interest element on the loan after I received the money?


Asked on 9/04/08, 7:24 am

1 Answer from Attorneys
Michael Markowitz Michael A. Markowitz, PC

Re: Interest on a loan

Since there was never a writing for the original loan, under the law it is due upon demand.

The company then asked for interest in consideration for not immediately demanding return of the money. You agreed to the new condition and signed the note. The legal term for this is novation.

You would be responsible to the company for the terms and conditions of the note signed in August 2006.

Mike.

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Answered on 9/04/08, 7:57 am


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