“If the obligation consists in the payment of a sum of money and the debtor is in default, compensation for damages, unless otherwise agreed, consists of the payment of the agreed interest and, in the absence of an agreement, the legal interest.” Default interest is a broad term and is closely related to the legal interests of money. Basically, it is the delay in the payment of a certain debt that leads to the recovery of additional interest. This is called default interest because the debtor exceeds the time specified in the contract. In that sense, the purpose of those interests is to compensate for the damage suffered by the creditor as a result of the default of the other party concerned. In the case of certain transactions where it is not possible to recover the due in time, it is when legal interests arise. This is a type of compensation intended for cases of breach of an acquired obligation. These include loans, debts and other obligations of an economic nature. It is provided for in the Law on the General State Budget and applies when the problem cannot be solved between the parties. The calculation of the legal interest is the last instance you can go to in these cases.
Legal interest does not only apply to loans between individuals, but goes far beyond natural persons. This includes everything from payments to employees of a company, pensions, temporary interest and late payment. It is thus a fairly broad legal framework aimed at punishing those who do not comply with their financial obligations. For this reason, it is necessary to make the parameters of transactions very clear in order to avoid reaching these cases. When this happens, the case is brought before a court, so it is a judge who makes the decision based on what the legal framework prescribes. However, it must be taken into account that no interest on the loan must have been agreed in the contract. In addition, statutory interest is calculated from the date on which the amount should have been paid until the obligation is fulfilled. Therefore, the debtor will see that the interest will accrue to him until he settles the acquired debt. This clearly shows how important it is to calculate legal interest in Spain. The next time you enter into an agreement of this type, it is important that you consider this regulation to protect your assets.
Remember that the law is made to defend you in case of non-compliance, non-payment being one of the most common today. Next time, all you have to do is go to court to proceed according to the steps prescribed by the legal framework. “From the time it is pronounced at first instance, any judgment or order ordering the payment of an amount of liquid funds shall determine, in favour of the creditor, the constitution of an annual interest equal to that of the legal interest on the currency, increased by two points, or equivalent to that corresponding to that which corresponds by mutual agreement of the parties or to a special provision of the law.” All this is delimited in the Civil Code, which explains what are the conditions that govern legal interests. In fact, it is quite easy to use this mechanism when a non-payment situation occurs. The key is not to negotiate an interest rate so that the legal framework takes care of the rest. In this way, the law aims to regulate and compensate part of the damage caused by the breach of the obligation. All this must be taken into account before the money is lent to third parties. Its operation is really very simpleImplemente the amount from which you must calculate the interest, choose the date from which the term begins to count, choose the date on which you must calculate the accrued interest, and finally choose one of the two methods of calculation (legal interest or judicial interest). The first calculator to perform historical calculations since 1940. However, in order for default interest to be collected, certain conditions must be met. First of all, the deadline set for the payment of the debt must have expired, in addition to what is due is money. On the other hand, in the event of default, an interest payment must have been agreed and there can be no agreement that rejects this acceptance.
All this shows that both set conditions that were not met, which would generate the collection of default interest. In this case, the interest corresponds to the legal interest of the money and adds up 2 percentage points. In addition, there is default interest, which is related to unpaid payments corresponding to the days of non-payment that exist. This is where the law of general budgets of the State comes in, which determines the late payment interest for each year. In these cases, this is the legal interest of the money plus 25%, which is an additional 3.75% by 2022. This applies to social security debts and other tax losses. In accordance with the requirements of the law, the legal interest in Spain is renewed every year. Therefore, the rate will be 3% this year 2022, so you will have to use this number to calculate the legal interest. You only need to know the amount due to calculate the fees charged to the defaulting debtor. However, this number can vary by three, six, nine months or more depending on the repayment period of the loan. In these cases, the annual amount is first calculated and divided by the number of days divided by 365. The legal interest of the currency is determined each year by the Law on the General State Budget, taking into account the economic situation and expectations.
There are several standard interest rates that cover a large number of areas. The first of these is the legal interest in the money that arises when what is due to the third party is not paid within the time limit. Thus, if no interest rate is set for non-payment, the legal interest on money in the amount of 3% will be charged for this year 2022. On the other hand, there is the interest of a late procedure, which occurs when a judgment is rendered that obliges the defendant to pay a sum of money. “The compensation for late payment shall be imposed ex officio by the judicial authority and shall consist of the payment of annual interest equal to the statutory interest on the currency in force at the time of maturity, increased by 50 per 100; This interest is considered to be earned for days without the need for a legal claim. However, two years after the debt has expired, the annual interest may not be less than 20 per 100. The General Law on the State Budget is the one that sets the guidelines for the calculation of legal interest. To do this, a formula is followed that helps determine the exact amount that the debtor must pay. This corresponds to the amount due for the delay period divided by 365 days. Subsequently, this result is multiplied by the legal interest rates, which are quite simple and that anyone can calculate quickly.
As we have already said, every year the maximum legal interests in Spain are renewed, depending on the economic situation of the country. Therefore, this year 2022, the highest interest rate on commercial default interest was 8%. These are related to failures between companies, it is usually a lot of money. Therefore, this figure is usually higher than other market interests.