Can pending interest be shown as loan on renewal ?

Mrs.n (Querist) 25 December 2013 This query is : Resolved
Dear Sirs,

Facts of the matter

One NBFC Listed company have given Loan/Inter corporate deposite to one private company for 60 days @24.% interest p.a.

The loan agreement was also executed and also the deed of personal guarantee.

then the borrowing company have asked for various extension to repay the same which lender company agreed .

But now the borrowing company have not paid interest for 5 months ?

QUERY

(1) can the lending company renew the loan agreement before expiry AND in the same agreement , can pending interest amount of 5 months be shown as LOAN by combining with principle amount ?? OR

2) can separate agreement be made for pending interest amount by showing it as LOAN ? OR

3) incase both the above option not suitable , pl.suggest most appropriate options.

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Guest (Expert) 25 December 2013
1.Yes It would be a fresh loan from the date of agreement. 2.More documentations involved but Yes

Rajendra K Goyal (Expert) 25 December 2013
Yes, for both the options. First is better of the two.

malipeddi jaggarao (Expert) 26 December 2013
I am for both options. Choice is for the lending company.

V R SHROFF (Expert) 26 December 2013
company's pleasure. co is fiancing, and they hv ample liberty.their business, their risk.

T. Kalaiselvan, Advocate (Expert) 26 December 2013
Properly advised by experts above.

R.V.RAO (Expert) 18 March 2014
unpaid interest can be clubbed with principal loan and a composite or combined loan documents can be made mutually acceptable, where borrowers and lenders need to sign fresh as a new loan documentation,newly dated effective only from the new dates on which it was signed

Guest (Expert) 18 March 2014
In renewal cases, the total outstanding amount including interest due till date of renewal is treated as principal amount for the purpose of calculation of interest after giving new life to loan by renewal.

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