In the absence of a partnership agreement, a loan given to the partnership by a partner attracts interest of

According to Partnership Act, when partners lend money to the partnership beyond their capital, they receive 5% interest per year by default. This applies only when the partnership agreement doesn’t specify a different rate.

The 5% rate is a legal default to be fair to lending partners. It prevents disputes when no agreement exists.

Remember: No agreement = Partnership Act rules apply = 5% interest on partner loans.