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Legal Rate Of Interest
The legal rate of interest is an interest rate specified by state law that a lender shall charge a borrower when there is no agreement between the parties.
Because it is uncommon for people to become borrowers of a lender, the legal rate of interest seldom applies in loans and credit facilities offered by traditional banks.
This is why legal rate of interest almost exclusively applies to court judgments.
Some of the events that can lead to this include:
- Pre-existing loans
The legal rate of interest should not be confused with lawful interest.
The amount is almost always the same rate as rates established in judgments.