private unsecured loan between 2 parties

California I made a personal loan, with a contract, in which I agreed to grant an interest free loan in exchange the receiving party agreed to pay a fixed amount per month until the loan was repaid. That period of time was scheduled to be 20 months. That time frame expires next month. Said party is 7 payments behind. I have informed said party that upon completion of the agreed upon time period I would begin charging interest on the outstanding balance and would also charge a late fee if payment was not received by the 15th of each month. Said party has refused to pay any interest but has agreed to resume payments. Am I within my rights to insist upon payment of interest?

Normally only if that was part of your original agreement--or he agrees to the new terms.

Since the loan recipient is in default upon original written contract, I believe that I, as the lender, have the right to demand payment in full or to set forth new terms for payment of the loan. Refusal to do so by the loan recipient seems to lead to legal action. While I would like to avoid such action, is there a better way to go about this matter?

[olive]

If he defaults you can sue for the full amount in most cases, or at least for any payments that have already come due.