At What Interest Rate Does It Constitute the Crime of Usury

Euro season, for some, is a time to relax and have fun with friends over a simple cup of coffee, while others take the opportunity to borrow at high-interest rates to "make a little money." It is precisely because of this desire to make a little extra that some end up without a home, or even lose their lives due to being chased by creditors. So, what interest rate is considered usurious?

Vietnamese law stipulates the loan interest rates as follows:

The basic interest rate, as regulated by the state in Decision No. 2868/QD-NHNN dated November 29, 2010, is 9% per year, equivalent to 0.75% per month.

Article 476 of the Civil Code 2005 stipulates the interest rates as follows: "Loan interest rates are agreed upon by the parties but must not exceed 150% of the basic interest rate announced by the State Bank for corresponding types of loans." Thus, according to the legal provisions, parties can only apply a maximum interest rate of 0.75 (x) 1.5 = 1.125% per month. If the parties agree on a loan amount exceeding this rate, in case of disputes, the law will only protect the interests of the lender within the limit of 1.125% per month (meaning the borrower only has to pay an interest rate of 1.125% per month).

Anyone who lends money at an interest rate higher than the highest rate prescribed by law by 10 times or more will be considered guilty of usurious lending under Article 163 of the Criminal Code 1999 as amended and supplemented in 2009. Specifically:

1. Anyone who lends money at an interest rate exceeding the highest legal rate by ten times or more, with an exploitative nature, shall be fined from one to ten times the interest amount or subjected to non-custodial rehabilitation for up to one year.
2. If the offender gains significant illicit profits, they shall be sentenced to imprisonment from six months to three years.
3. The offender may also be subject to a fine of one to five times the illicit profit, prohibited from holding certain positions, practicing certain professions, or performing certain jobs for one to five years.

Thus, Vietnamese law strictly penalizes usurious lending behavior. If the loan interest rate exceeds 10 times the maximum allowed, it is possible to report it to the police for resolution.

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