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Simple English definitions for legal terms
moratory interest
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A quick definition of moratory interest:
Term: Moratory Interest
Definition: Moratory interest is a type of interest that is charged when someone is late in paying back money they owe. It is also known as prejudgment interest. Interest is the extra money that is added to the amount borrowed, and moratory interest is added when the borrower is late in paying it back. It's like a late fee for borrowing money.
A more thorough explanation:
Definition: Moratory interest is a type of interest that is charged on a debt or obligation that is not paid on time. It is also known as prejudgment interest.
Example: If a person borrows money from a bank and fails to make the payments on time, the bank may charge moratory interest on the outstanding amount. This means that the borrower will have to pay an additional amount as interest on the overdue amount.
This example illustrates how moratory interest works. When a borrower fails to make timely payments, the lender may charge additional interest to compensate for the delay in receiving the payment.