According to the relevant provisions of the Contract Law, the borrower fails to repay the loan within the time limit stipulated in the loan contract, which is a breach of contract and should bear the liability for breach of contract. The ways to bear the liability for breach of contract include returning the loan principal, paying the interest during the loan period agreed in the contract and paying the interest of loans overdue. Repaying the loan principal and paying interest within the loan period agreed in the contract will generally not cause disputes because the parties have clearly agreed in the loan contract; There is a great dispute between the parties about the interest on overdue loans, and the standards applied by judges in hearing such cases are not uniform, which affects the authority of the law. Lawyers believe that it is necessary to integrate this issue so that everyone's understanding can be unified.
The funds invested by banks in such loans may or may not be recovered in the future. There is a great possibility of losses, and commercial banks usually have to impose a penalty interest on such loans. Overdue loans are the problem assets of banks. Commercial banks should maintain a high capital reserve, and the reserve ratio is generally 50%.
Loan interest rate editor
The overdue loan ratio refers to the proportion of overdue loans to all loans.
The overdue loan ratio is used to reflect the repayment of loans on schedule, and to reflect the efficiency of loan and asset risk procedures from the perspective of whether they are repaid on schedule. The purpose of monitoring the overdue loan ratio is to promote banks to properly handle overdue loans as soon as possible.
Calculation method editing
Calculation
Article 207 of the Contract Law stipulates: "If the borrower fails to repay the loan within the agreed time limit, it shall pay overdue interest in accordance with the agreement or relevant state regulations". The repealed "Economic Contract Law" and "Regulations on Loan Contracts" have clearly stipulated that overdue loans should be penalized. 1995 notice of the people's bank of China on interest-bearing measures after adjusting the loan interest rate (hereinafter referred to as the notice) and 1999 regulations on the administration of RMB interest rate (hereinafter referred to as the regulations) have detailed regulations on interest-bearing of overdue loans, and the Supreme People's Court also has regulations on such issues.
According to the above provisions, combined with the actual trial, there are two main ways to calculate the interest of overdue loans: one is the agreed interest rate during the contract period. Within the performance period agreed in the loan contract, as long as it does not violate the provisions of the People's Bank of China on the upper and lower limits of the loan interest rate of financial institutions, and private lending is not higher than 4 times the bank loan interest rate, the interest paid by the borrower can be used to calculate the overdue interest of overdue loans according to the interest rate agreement. Second, calculate the interest according to the relevant regulations of the People's Bank of China. This interest-bearing method still abides by the original loan interest rate during the performance of the loan contract, and the overdue interest in installments is not calculated when the interest rate is adjusted. For the interest rate of overdue loans, the overdue interest shall be collected by installments according to the interest rate adjusted in different periods determined by the People's Bank of China, and the overdue interest shall be collected by default interest according to a certain proportion, or by installments according to the default interest rate determined by the People's Bank of China. At the same time, during and after the performance of the contract, quarterly interest settlement is adopted (short-term loans can also be settled monthly within one year), and the quarterly interest settlement date is the 20th day at the end of the quarter. If the borrower fails to pay interest on time, compound interest shall be calculated.
Of the above two interest-bearing methods, the former is generally suitable for private lending, while the compound interest in the latter is not suitable for private lending. The latter is generally applicable to bank loan contracts, while the former is not prohibited by law. The two interest calculation methods have their own characteristics. Collecting overdue interest according to the agreement can fully embody the principle of autonomy of the parties to the contract within the scope permitted by law, and the calculation method is simple. However, if the overdue period is long and the national interest rate is greatly adjusted, the interest charge may be too high or too low, which violates the spirit of fair civil law. Collecting overdue loan interest according to the relevant provisions of the People's Bank of China can appropriately reflect the overdue loan interest payable, but the implementation process is too cumbersome.