Loan with 20% Interest per Month: Is It Subject to Criminal Prosecution?

Based on the provisions in Clause 1, Article 468 of the Civil Code 2015:

The loan interest rate is agreed upon by the parties. In cases where the parties agree on an interest rate, the agreed interest rate shall not exceed 20% per annum of the loan amount, except for cases where other relevant laws provide otherwise.

According to the information you provided, your loan has an interest rate of 20% per month => 240% per annum => exceeding 120 times the maximum interest rate the parties are allowed to agree upon under the regulations.

Therefore, this lending act is identified as usury, with grounds for criminal prosecution for Usury in Civil Transactions as stipulated in Article 201 of the Penal Code 2015, amended by Point i, Clause 2, Article 2 of the Law on Amendments to the Penal Code 2017.

To be specific:

- Anyone in civil transactions who lends at an interest rate five times or more than the highest interest rate prescribed in the Civil Code, gaining illicit profits from VND 30,000,000 to less than VND 100,000,000, or has been administratively sanctioned for this act or has been convicted for this crime and has not had their criminal record expunged but still commits the violation, shall be fined from VND 50,000,000 to VND 200,000,000 or subject to non-custodial reform for up to 03 years.

- Committing the crime and gaining illicit profits of VND 100,000,000 or more, shall be fined from VND 200,000,000 to VND 1,000,000,000 or imprisoned for 06 months to 03 years.

- Offenders may also be subject to a fine from VND 30,000,000 to VND 100,000,000, prohibited from holding certain positions, practicing certain professions, or doing certain jobs from 01 year to 05 years.

Thus, in case of criminal prosecution for the mentioned offense, depending on the nature and extent of the violation, the lender will be subject to the corresponding penalty framework.

Respectfully!