§ 6-11. Interest the guarantor (kausjonist) must pay on default

The Financial Contracts Act (Finansavtaleloven)·LOV-2020-12-18-146

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The text of the law (unofficial translation)

§ 6-11. Interest on late payment

(1) When the lender (kredittyter) has notified the guarantor of the credit customer's default in accordance with § 6-3 first paragraph, the lender may claim interest from the guarantor for the period after the notified default occurred, calculated at the interest rate that would have applied under the credit agreement (kredittavtale) if the credit had not been in default. If notice is sent later than required by § 6-3 first paragraph, the lender may claim interest as mentioned for payment obligations that fell due later than three months before the notice was sent.
(2) The guarantor is not liable for special late payment interest (forsinkelsesrente) resulting from the credit customer's default. When the guarantee liability has fallen due, the guarantor is liable for late payment interest under the general rules.
Source: Lovdata — Finansavtaleloven (the Financial Contracts Act) § 6-11

What does this mean?

The section states which interest the lender can claim from the guarantor when the borrower defaults. If the lender has notified the guarantor in time under § 6-3, the lender can claim interest from when the default occurred, at the interest rate the agreement would have had without the default. If the notice comes too late, the interest claim only covers payments that fell due less than three months before the notice was sent. The guarantor is not liable for special late payment interest triggered by the borrower's default. When the guarantee liability itself has fallen due, the guarantor can be charged late payment interest under the ordinary rules.

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