Mont. Code Ann. » TITLE 31. CREDIT TRANSACTIONS AND RELATIONSHIPS · CHAPTER 1. CREDIT TRANSACTIONS · Part 1. Loans of Money -- Interest Rates
Montana Code Annotated

Mont. Code Ann. § 31-1-109 (2026)

When Interest Becomes Part Of Principal

✓ current as of May 2026
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  1. MCA Contents
  2. TITLE 31
  3. CHAPTER 1
  4. Part 1
  5. 31-1-109 When interest becomes part of principal

TITLE 31. CREDIT TRANSACTIONS AND RELATIONSHIPS

CHAPTER 1. CREDIT TRANSACTIONS

Part 1. Loans of Money -- Interest Rates

When Interest Becomes Part Of Principal

31-1-109. When interest becomes part of principal. The parties may, in any contract in writing whereby any debt is secured to be paid, agree that, if the interest on such debt is not punctually paid, it shall become a part of the principal and thereafter bear the same rate of interest as the principal debt.

History: En. Sec. 2587, Civ. C. 1895; re-en. Sec. 5213, Rev. C. 1907; re-en. Sec. 7728, R.C.M. 1921; Cal. Civ. C. Sec. 1919; re-en. Sec. 7728, R.C.M. 1935; R.C.M. 1947, 47-127.

Notes of Decisions
Cited in 3 cases, 1992–2007 · leading case: McCormick v. Brevig, 2007 MT 195 (Mont. 2007).
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McCormick v. Brevig, 2007 MT 195 (Mont. 2007). · cites it 5× “Civil Code of 1895, § 2587, now § 31-1-109, MCA; Stanford v. Coram, 26 Mont.”
Brummer v. TMG Life Ins. (In Re Brummer), 147 B.R. 552 (Bankr. D. Mont. 1992). · cites it 6× “Section 31-1-109, provides for charging compound interest as follows: The parties may, in any contract in writing, whereby any debt is secured to be paid, agree that, if the interest on such debt is not punctually paid, it shall become a part of the principal and thereafter bear…”
Bank of Baker v. Mikelson Land Co., 1999 MT 76 (Mont. 1999). “¶45 Mikelson’s first contention is that §§ 31-1-109, and 25-9-205, MCA, preclude interest from the date of the foreclosure judgment to the final deficiency.”
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