(a) The compensation for forbearance of property loaned at a fixed valuation, or for money, shall, in the absence of any agreement to the contrary, be at the rate of eight per cent a year; and, in computing interest, three hundred sixty days may be considered to be a year.
(b) Unless otherwise provided by agreement, interest at the legal rate from the date of maturity of a debt shall accrue as an addition to the debt.
(1949 Rev., S. 6776; 1971, P.A. 783, S. 1; P.A. 79-364, S. 1; P.A. 15-14, S. 8.)
History: 1971 act added new Subsec. (b) providing that interest shall accrue as an addition to the debt; P.A. 79-364 changed rate of interest from 6% to 8% in Subsec. (a); P.A. 15-14 made a technical change in Subsec. (a).
Allowed because of contract express or implied or as damages. 22 C. 392; 72 C. 705. Note “with fifteen per cent after maturity”; the per cent held to be interest and not damages. 42 C. 524. Effect of validating act subsequently repealed on usurious contract for interest. Id., 574; 56 C. 214. A note on which the interest is payable quarterly at the legal rate is not usurious. 44 C. 494. The law takes note of the running of interest at the legal rate where the principal is due. 56 C. 114. The taking of interest in advance on a demand note constitutes an agreement to forbear for that time. 63 C. 87. Generally, any rate agreed on is lawful. 76 C. 388. Agreed rate governs till default, then legal rate; exceptions. 78 C. 323. Effect of insolvency of bank on its liability to pay interest. 88 C. 206. Cited. 126 C. 461; 147 C. 225. An agreed interest rate will prevail over the stated rate in statute. 160 C. 534. Cited. 177 C. 149; 186 C. 612; 188 C. 316. Postmaturity interest continues to accrue at the legal rate on the unpaid balance of the loan even after entry of judgment and until outstanding balance is paid in full, unless the parties agree otherwise. 315 C. 433.
Cited. 13 CA 330; 15 CA 718; 44 CA 402. Statute not applicable where there is a wrongful detention of funds and no forbearance. 109 CA 691.
Cited. 10 CS 240. Statutory rate of interest does not apply unless there is an expressed or implied agreement to pay interest. 29 CS 114. Cited. 38 CS 610; 41 CS 538.