Minimum Payment – also known as Minimum Interest Rule. it is a law requiring a minimum rate of interest is charged on any loan transaction between two parties.

The minimum-interest rules mandate that even if no rate is charged by the lender, an arbitrary rate shall be automatically imposed upon the loan. The minimum-interest rules are at least partly intended to prevent excess gifting between taxpayers via intra-family loans with no or below-market interest rates.

Minimum-interest rules are fairly complex and have been subject to numerous changes and modifications. There are separate rules for personal and commercial loans and sales of property that are financed by the seller.

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Related ChexSystems Banking Information:

1. Federal Discount Rate
2. Minimum Average Balance to Avoid Fees
3. Money Market Account
4. Bank
5. Money Market Deposit Account

Tagged as: Minimum Interest Rule, Minimum Payment