The interest rate for default interest is determined based on the default interest rate agreed between the parties, but the agreed default interest rate shall not exceed four times the one-year loan market quoted interest rate when the contract is established. Any excess will not be protected by law.

Legal Basis

Article 29 of the "Regulations of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases"

Both borrowers and lenders have different opinions on overdue interest rates. If agreed, the agreement shall prevail, but shall not exceed four times the one-year loan market quoted interest rate at the time the contract is established.

If the overdue interest rate is not agreed upon or the agreement is unclear, the People's Court may handle different situations:

(1) Neither the interest rate during the loan period nor the overdue interest rate is agreed upon, the lender shall The people's court shall support the claim that the borrower shall bear the liability for overdue repayment from the date of overdue repayment; (2) The interest rate during the loan period has been agreed but the overdue interest rate has not been agreed upon, and the lender claims that the borrower shall be liable for overdue repayment. If a person pays the interest during the period of capital occupation according to the interest rate during the borrowing period from the date of overdue repayment, the people's court shall support it.