INTEREST
A comprehensive term to describe any right, claim,
or privilege that an individual has toward real or
PERSONAL PROPERTY. Compensation for the use
of borrowed money.
There are two basic types of interest: legal
and conventional. Legal interest is prescribed by
the applicable state statute as the highest that
may be legally contracted for, or charged. Con-
ventional interest is interest at a rate that has
been set and agreed upon by the parties them-
selves without outside intervention. It must be
within the legally prescribed interest rate to
avoid the criminal prosecution of the lender for
