When it comes to loans, the word interest is inevitably mentioned. This can be seen as price for services rendered, where the creditor provides the debtor with a certain amount of financing for a fixed period.
If we consider that money is essentially and essentially a form of commodity, usually called capital (actually a substitute for the commodity, before the concept of money was invented, the commodity was used for barter or barter to obtain the necessary product) , interest seems to be understood more simply as the price someone pays to benefit from financing.
In this article you will find details and information about interest in general, but also in one of its forms, legal remuneration, which has wide applicability in modern financial operations and legal relations of civil contracts.
1. Interest paid: concept, definition and reasons
The legislation, especially the «Civil Code», establishes that according to the agreement of the parties in the credit contract, the benefits can be collected in cash or other forms of benefits. As such, they may include various goods, services or combinations thereof, or accepted financial instruments of payment.
From a doctrinal point of view, the term interest can include at least three meanings, all of which apply to various scenarios of economic and social relations today:
- Interest can be viewed as a principal payment, as is the case with the standard loan, with no fees. From this point of view, it is similar to civil or commercial fruits resulting from the use or usufruct of property;
- Interest can also be understood as damages, that is, the payments to which a debtor is obliged in case of breach of certain supposed obligations to give certain sums of money within a certain term;
- Interest can also mean a benefit or gain that the rightful owner of the capital -the debtor- did not realize because he was deprived of his possession as a result of damage.
From the point of view of the fact or the resulting action, interests are of two kinds: contractual and legal.
The first of these is found in the agreement reached between the two parties through the loan contract, and is due even if the amount is not specified in the agreement between the debtor and the creditor.
The legal interest arises precisely in the absence of an agreement between the parties when the law determines its application, form of payment and amount.
Legal remunerative interest is regulated along with criminal interest in Government Regulation No. 1. 13/2011, which also establishes the general legal regime of the concept of legitimate interest.
2. Reference for calculating the legal interest paid for the debtor’s default
As a general rule, according to OG No. 13/2011, the amount of legal interest paid is equal to the reference rate of the National Bank of Romania.
The BNR reference rate is an independent indicator that is determined by applying the formula for calculating the arithmetic average interest rate on deposits and other business earnings received by an institution. Financials, such as reverse repos and types of repositories. All of these averages are then weighted by total transaction volume.
Calculations are made for the previous month of publicly announced operations.
The index, also known as the monetary policy rate, is set monthly by decision of the BNR Board of Directors. Every time there is a change in the level of the index, it is published in the first part of the Official Gazette of Romania.
One aspect that should be mentioned and remembered about legal assets is that they are also governed by civil law, the Civil Code. In accordance with the basic normative behavior that regulates legal relations, if the debtor has to pay interest rate debts greater than the legal amount of the credits before the expiration date, the liquidation of damages and losses is not determined at this last level. , but at the level applicable before the expiration date.
Remunerative legal interest is a useful tool for strict regulation and health maintenance of financial relations in the economy, and linking its amount to the BNR monetary policy interest rate is a guarantee of adequate compensation, both creditor and debtor relationships.