Maybe. Suppose this relative sued you for the loan amount, and the relative won in court, thus obtaining a judgment against you. The judgment will be for the actual amount he sued you for, plus the costs of filing the lawsuit and paying to have it served on you, plus prejudgment interest from the loan date or the date of the last payment, whichever is later. The prejudgment interest rate is 4.75% per year.

If your relative is asking for more interest than the statutory rate, then the chances of him being awarded more by the court are not good, because there was never an agreement to pay interest and even if there was (or the Court decided there was an implicit agreement to pay interest), who's to say what rate? 5%? 10%? 18%?

Maybe. Suppose this relative sued you for the loan amount, and the relative won in court, thus obtaining a judgment against you. The judgment will be for the actual amount he sued you for, plus the costs of filing the lawsuit and paying to have it served on you, plus prejudgment interest from the loan date or the date of the last payment, whichever is later. The prejudgment interest rate is 4.75% per year.

If your relative is asking for more interest than the statutory rate, then the chances of him being awarded more by the court are not good, because there was never an agreement to pay interest and even if there was (or the Court decided there was an implicit agreement to pay interest), who's to say what rate? 5%? 10%? 18%?