LEGAL INTEREST

The right, claim, or privilege that an individual has toward real or personal property. Compensation for the use of borrowed money.

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The highest rate of interest that can be legally charged on any type of debt. The legal rate of interest applies to all types of debt, although this rate may differ from one type of debt to another. This limit is set to prevent lenders from charging excessive rates of interest to borrowers.

 

INTEREST AND DEBT RECOVERY COSTS

 

You can claim interest and debt recovery costs if another business is late paying for goods or a service.

 

If you havenít already agreed when the money will be paid, the law says the payment is late after 30 days for public authorities and business transactions after either:

 

- the customer gets the invoice

- you deliver the goods or provide the service (if this is later)

- You can agree a longer period for payments from one business to another - but if itís longer than 60 days it must be fair to both businesses.

 

Legal Interest or Late Payment Interest has two purposes. It is to compensate creditors for the late payment of debts. And also to deter late payment. It only applies to the commercial supply of goods and services where you don't have a provision for interest in your Terms of Business.

 

For invoices that are not paid on time, it enables to claim interest, compensation and reasonable costs of collecting the debt.