The court stipulates that the interest rate of liquidated damages shall not exceed 24%, and if it is lower than 24%, it shall be implemented according to its agreement. The part exceeding the annual interest rate of 24% is not returned, and the court supports it.
According to the provisions of the Supreme People's Court on several issues concerning the application of law in the trial of private lending cases, the following provisions are made:
1. Article 29 If there is an agreement between the borrower and the lender on the overdue interest rate, it shall be implemented according to the agreement, but the annual interest rate shall not exceed 24%.
If the overdue interest rate is not agreed or clearly agreed, the people's court may handle it according to different circumstances:
(1) The lender claims that the borrower should pay the interest during the period of capital occupation at the annual interest rate of 6% from the date of overdue repayment, and the people's court should support it because the interest rate during the loan period has not been agreed;
(2) If the interest rate during the loan period is agreed, but the overdue interest rate is not agreed, the people's court shall support the lender to claim that the borrower shall pay the interest during the capital occupation period according to the interest rate during the loan period from the date of overdue repayment.
2. Article 30 The lender and the borrower have agreed on overdue interest rate, liquidated damages or other expenses. The lender may choose to claim overdue interest, liquidated damages or other expenses, or both, but the people's court will not support the part that exceeds 24% of the annual interest rate.
Legal provisions of the Civil Code on liquidated damages in loan contracts
Article 581 Where one party fails to perform the debt or the performance is not in conformity with the contract, and the performance cannot be enforced according to the nature of the debt, the other party may request it to bear the expenses to be performed by the third party.
Article 582 Where the performance is not in conformity with the agreement, it shall bear the liability for breach of contract in accordance with the agreement of the parties. If the liability for breach of contract is not stipulated or clearly stipulated and cannot be determined according to the provisions of Article 510 of this Law, the injured party may reasonably choose to require the other party to bear the liability for breach of contract such as repair, rework, replacement, return, price reduction or remuneration according to the nature of the subject matter and the size of the loss.
Article 583 Where one party fails to perform its contractual obligations or fails to comply with the contract, and after performing its obligations or taking remedial measures, the other party still suffers other losses, it shall compensate for the losses.
Article 584 Where a party fails to perform its contractual obligations or fails to perform its contractual obligations in conformity with the contract, thus causing losses to the other party, the amount of damages shall be equivalent to the losses caused by the breach of the contract, including the benefits that can be obtained after the performance of the contract; However, it shall not exceed the losses that the breaching party foresaw or should have foreseen when concluding the contract.
Article 585 The parties may agree that one party shall pay a certain amount of liquidated damages to the other party for breach of contract, or may agree on the calculation method of the amount of compensation for losses caused by breach of contract.
If the agreed liquidated damages are lower than the losses caused, the people's court or arbitration institution may increase the liquidated damages at the request of the parties; If the agreed liquidated damages are excessively higher than the losses caused, the people's court or arbitration institution may appropriately reduce them at the request of the parties.
If the parties concerned pay liquidated damages for delayed performance, the breaching party shall also perform the debt after paying the liquidated damages.
Article 586 The parties may agree that one party shall pay a deposit to the other party as security for the creditor's rights. The deposit contract is established when the deposit is actually paid. The amount of the deposit shall be agreed by the parties; However, it shall not exceed 20% of the subject matter of the main contract, and the excess shall not have the effect of deposit. If the actual amount of deposit paid is more than or less than the agreed amount, it shall be deemed as a change of the agreed amount of deposit.
Article 588 Where the parties have agreed on both liquidated damages and deposit, if one party breaches the contract, the other party may choose to apply the liquidated damages or deposit clause.
If the deposit is not enough to make up for the losses caused by one party's breach of contract, the other party may demand compensation for the losses exceeding the deposit amount.