In India, you may be able to claim interest on money you lent informally, but you cannot automatically impose additional interest just because the borrower has delayed repayment. The answer depends on what you both agreed, the evidence available, and the applicable law.
Key points
If interest was agreed: You may be able to claim the agreed rate, subject to applicable laws and any restrictions on excessive interest.
If no interest was agreed: You generally cannot unilaterally create a new interest rate after lending the money. However, a court may award reasonable interest in appropriate circumstances.
After sending a legal notice: Under Section 3 of the Interest Act, 1978, a court may allow interest on certain debts from the date specified in a written notice stating that interest is being claimed, up to the date proceedings begin. This is subject to the Act's conditions and the court's discretion. 
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India Code
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During and after a court case: The court may also consider interest under Section 34 of the Code of Civil Procedure, 1908, depending on the circumstances.
If you regularly lend money for profit: State money-lending laws and licensing requirements may apply. The rules can vary by state.
What should you do?
- Preserve bank transfers, UPI receipts, WhatsApp chats, and any messages about repayment or interest.
- Check whether there was an express or implied agreement about interest.
- Consult a lawyer before demanding a particular interest rate.
- If the borrower refuses to pay, consider a legal notice demanding the principal and any legally supportable interest.
- Do not assume that a legal notice automatically makes interest payable or extends the limitation period for recovering the principal.
