Interest rate regulations

DMS Law office in Danang, Vietnam advises about regulations on interest rates between a lender and a borrower, interest rate on overdue principal ? 

Interest rates

The rate of interest for a loan shall be agreed by the parties.

The rate of interest for a loan agreed by the parties shall not exceed 20% per year, unless otherwise prescribed by law.

According to actual conditions and at the proposal of the Government, the Standing Committee of National Assembly shall adjust the above interest and report to the National Assembly at the latest session.

If the agreed interest exceeds the maximum interest prescribed in this Clause, the excessive interest shall become invalid.

Where parties agree that interest will be payable but fail to specify the interest rate and have a dispute to the interest rate, the interest rate of the loan shall equal 50% of the maximum interest prescribed in Clause 1 of this Article at the repayment time.

Interest rate on the overdue principal

Interest on the principal as agreed in the contract in proportion to the overdue loan term, in addition the borrower shall have to pay interest at the rate prescribed in Clause 2 Article 468 in case of late payment;

Interest rate on the overdue principal equals 150% of the interest rate agreed in the contract in proportion to the late payment period, unless otherwise agreed (Article 478, Clause 5 Article 466 The Civil Code No. 91/2015/QH13 dated November 24, 2015).

Related topics:

Compensation for damage caused by breach of contract

Penalty for breach of contract

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(Signed)
Lawyer Do Minh Son