What accrues legal interest if loan repayment is delayed?

In the context of financial obligations, especially regarding loans, legal interest typically applies to the principal amount, which is the original sum borrowed. When repayment is delayed, the primary financial responsibility is for the borrower to repay not just the principal but often includes any stipulated interest on that amount.

Legal interest accrues on the principal because that is the amount that was initially lent and is subject to repayment terms. If there’s a delay in repayment, it is this principal amount that the lender has effectively lost the use of, meaning they are entitled to compensation through interest until the loan is repaid.

In this scenario, the notion of "premium" typically refers to additional costs or fees that may be incurred. However, unless specifically stated in the contract, legal interest generally does not apply to these additional fees — it is focused on the principal sum that has been borrowed.

Therefore, since legal interest applies to the amount of money that is considered the primary obligation (in this case, the principal), the assertion that only the principal amount bears legal interest aligns with common practices in financial agreements and legal statutes governing such contracts.