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Many people know that the interest rate of private lending can not be more than four times of the bank's loan interest rate in the same period, otherwise it would be usury. So can overdue interest and liquidated damages be four times higher than the bank's loan interest rate in the same period? According to the opinion of Shanghai high court, the part with the liquidated damages more than four times belongs to the free agreement of the parties, and the agreement of the parties shall be respected. However, if the borrower proposes it, the court shall adjust the part with the liquidated damages more than four times. That is to say, compared with the absolute prohibition of borrowing interest more than four times, the standard of liquidated damages is more relaxed, and only when the borrower puts it forward can the court adjust it.
It is worth noting that in the case that only the loan interest is agreed but not the overdue interest, because the borrower is the defaulting party, in order to protect the interests of the lender, the lender claims that the overdue interest with the same interest as the loan interest can be supported by the court. And when there is no agreement on the loan interest or the loan interest is lower than the loan interest rate of the same period of the bank, the lender may also claim the overdue interest with the same loan interest rate of the same period of the bank from the court.
It can be seen that the court summed up the principles of handling interest and liquidated damages in the trial as follows: 1. The loan interest must not exceed four times of the bank's loan interest rate in the same period. 2. The agreement on overdue interest and liquidated damages shall respect the free agreement of the parties, but if the borrower proposes, the court shall not protect the part that exceeds four times the loan interest rate of the bank in the same period. 3. When the borrower fails to pay the overdue interest, the court can adjust the overdue interest from the perspective of protecting the interests of the lender.
