The liquidated damages are generally calculated according to the percentage of the outstanding balance at the time of prepayment (generally 2% to 5%); Or stipulate interest for several months. However, the maximum liquidated damages are bound by the contract or the law. For the collection of liquidated damages, there are mainly the following algorithms: 1. The validity period of liquidated damages usually does not exceed 3 years. After the validity period, the rate of liquidated damages will be cancelled, or gradually reduced, or it may only be 1% of the balance. However, as long as part of the prepayment does not exceed 2% of the loan balance every year, there is no need to pay liquidated damages. 2. The general lender will provide several liquidated damages schemes for the borrower to choose from. If the borrower chooses a contract with liquidated damages, the lender will provide a lower loan fee or a lower loan interest rate. Generally, the interest rate of the contract with liquidated damages is .25% to 1.% lower than that of the contract without liquidated damages. If both parties agree, the agreement will be valid. Legal objectivity:

Article 58568 of the Civil Code may stipulate that one party shall pay a certain amount of liquidated damages to the other party according to the situation of breach of contract, and may also stipulate 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 them 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 the delay in performance, the breaching party shall also perform the debt after paying the liquidated damages.