I want to send a legal notice for the recovery of money i.e. 3,03,000/-. Can u please tell me what should be the rate of interest i should demand in my notice ? Is there any rule for demanding the rate rate of interest ?
Is it a commecial transaction ? If the transaction is connected with industry, trade or buiness you can claim the interest... Choice is yours.. Claim 18% p.a.. According to my experience even if we claim 18% p.a. in the legal notice, the other party pays the amount due immediately and do not pay any interest and issues are closed.
The interest rate claimed should be reasonable and justifiable. It should not be arbitrary. The interest rate should be calculated on the basis of of what your principal would have earned you incase your friend had not taken the loan + inconvinience charges. To my find 15-18% is a reasonable amount.
The rate of interest we claim through a legal notice is an opportunity cost of funds. In practice in many legal notices the reasonable percentage of 18 is mentioned. However, 70% of the cases are settled without any interest after receiving the notice by the other party.