Summary: The annual interest rate within 24% is protected by law. 24% to 36% is a natural debt zone, and the law does not interfere. If you give more, you can't take it back. You can't force it if you don't give it. If the annual interest rate is above 36%, it is invalid. If you pay more, you can get something in return.
Basic information
In private lending, the borrowers and borrowers are most likely to have conflicts on the interest of private lending. Private lending interest disputes can refer to the clear provisions of the contract law:
First, according to the principle of good faith, if there is no agreement on interest in the loan contract between the borrower and the borrower, it has the nature of free loan to a certain extent. If the debtor repays the loan before the expiration of the loan period, or if the repayment period is not agreed, and the creditor demands repayment within a reasonable period, no interest shall be paid.
Second, if there is a dispute after the borrower and lender agree on the interest rate standard, the interest rate standard can be determined within the standard of not exceeding 4 times the interest rate of similar loans of banks. Excess interest is not guaranteed.
Third, in interest-bearing lending, the interest rate can be appropriately higher than the bank interest rate, and the interest rate agreed by both borrowers and lenders does not exceed the annual interest rate of 24%. If the lender requests the borrower to pay interest at the agreed interest rate, the people's court shall support it. The interest rate agreed between the borrower and the borrower exceeds the annual interest rate of 36%, and the interest agreement in excess is invalid. The people's court shall support the borrower's request to the lender to return the interest paid in excess of 36% of the annual interest rate.
Fourth, it is clearly stipulated in the "Several Opinions on People's Courts Hearing Loan Cases"; Lenders may not include interest in the principal to calculate compound interest, otherwise it will not be protected by law. This provision is punitive in judicial practice. If this provision is violated, the court may decide to pay interest according to the loan interest rate for the same period. Then, the multiple you agreed at the beginning may or may not be claimed.
Fifth, if there is a dispute between the two parties over borrowing foreign currency or Taiwan dollar, and the lender requests repayment in the same currency, it can be allowed. If the borrower does not have the same currency, he can repay in RMB with reference to the foreign exchange rate at the time of repayment. If the lender requests to pay interest, it may calculate the interest with reference to the foreign currency savings rate of China Bank.
The above are some clear provisions of the law on the interest of private lending, and corresponding countermeasures have been taken in practice. When you encounter some interest disputes, you can refer to these regulations.
legal provision
Article 2 1 1 of the Contract Law stipulates:
If the loan contract between natural persons stipulates the payment of interest, the loan interest rate shall not violate the relevant provisions of the state that limit the loan interest rate.
Article 6 of the Opinions on the Trial of Lending Cases stipulates that:
The interest rate of private lending can be appropriately higher than the bank interest rate, and the local people's courts can specifically grasp it according to the actual situation in the region, but the highest interest rate shall not exceed four times the interest rate of similar loans of banks (including this interest rate). Beyond this limit, the excess interest will not be protected.
References:
Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases