Determination of Interest and Interest Rates in Loan Contracts Applicable to the 2005 Civil Code

Determining interest, interest rates in asset loan contracts subject to the application of the 2005 Civil Code as stipulated in Article 4 of Resolution 01/2019/NQ-HDTP. To be specific:

Asset loan contracts that are not credit contracts established before January 1, 2017, subject to the application of the 2005 Civil Code as guided in Article 2 of this Resolution, at the time of first instance trial, the interest and interest rates in the contract are determined as follows:

- Loan contracts without interest, when due, if the borrower does not repay the debt or only partially repays, the borrower is obligated to pay interest on the overdue principal debt at the basic interest rate announced by the State Bank at the time of repayment corresponding to the delayed repayment period, provided that the parties have agreed on interest payment for the overdue principal debt.

Interest on overdue principal debt not yet repaid = (overdue principal debt not yet repaid) x (basic interest rate announced by the State Bank at the time of repayment) x (delayed repayment period).

In Clause 2 Article 4 of Resolution 01/2019/NQ-HDTP, it is stipulated:

- Loan contracts with interest, when due, if the borrower does not repay or only partially repays, the interest and interest rates are determined as follows:

+ Interest on unpaid principal within the term is calculated based on the agreed interest rate but not exceeding 150% of the basic interest rate announced by the State Bank at the time the contract was established, corresponding to the unpaid loan period. In case the parties do not clearly determine the interest rate, the basic interest rate announced by the State Bank at the time of repayment shall be applied.

Interest on unpaid principal within the term = (unpaid principal) x (agreed interest rate or basic interest rate announced by the State Bank at the time the contract was established) x (unpaid loan period on principal);

+ Interest on overdue principal amount not yet repaid is calculated based on the basic interest rate announced by the State Bank at the time of repayment corresponding to the delayed repayment period.

Interest on overdue principal amount not yet repaid = (overdue principal amount not yet repaid) x (basic interest rate announced by the State Bank at the time of repayment) x (delayed repayment period);

- When determining interest, interest rates as guided in Clauses 1 and 2 of this Article, the Court is not allowed to calculate interest on unpaid interest.

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