The late interest penalty is the default liability that the borrower has assumed under an agreement or under the law for failing to repay the principal interest on the loan on time after the repayment date. The method of calculating the late interest rate is usually calculated at a specific rate of one per 10,000 per day, i.e. the interest rate. How, then, should it be calculated

How do you calculate the overdue penalty

I. UNDERSTANDING THE DEFINITION OF LAUNCHED PAYMENT

In a standard borrowing contract, there is usually an agreement on late interest rates. Overdue interest payments are those for which the borrower has not paid its debt on credit in full at the date when the principal or interest is due, and the penalty shall be calculated and paid in accordance with the terms of the contract or the law。

II. Determination of the rate of interest at which interest will be levied

The first step is to set the interest rate for the interest rate before it begins to run. The interest rate of the penalty consists mainly of three parts:

1. Contract agreement: The interest rate for the late interest rate is generally specified in the borrowing contract and therefore will need to be calculated in accordance with the terms of the contract when calculating the late interest rate。

2. The policy stipulates that, according to the relevant State policy, the interest rate on the loan may not be four times higher than the rate on the local loan during the same period, otherwise it is a loan loan and is illegal。

3. Legal provisions: In some cases, the maximum interest rate is set in the laws and regulations, so that the provisions of the laws and regulations are complied with when calculating the late interest rate。

III. METHODOLOGY OF APPROPRIATE PAYMENT

1. The daily rate shall be calculated as the daily difference between principals to be repaid by the day. The amount of interest due is calculated as: the number of days overdue x the rate of interest penalty x the total amount of interest outstanding。

2. Monthly interest rate: the maturity date is calculated on a monthly basis and the principal interest rate is not returned for the month in which the payment is made. The late interest rate is calculated as the number of months overdue x interest rate x the total unpaid principal。

The method of calculating late interest rates is fixed, whether by day or by month, but how it should be calculated and enforced in accordance with contracts and regulations。

IV. Applicability of late fines

Overdue interest rates are not applicable to all loans, and different types of loans are subject to different interest-rate rules, divided into three main situations:

1. Individual loans: Individual loans are subject to a daily interest-rate rule, which is usually calculated at a rate of 10,000 per day。

2. Corporate loans: Corporate loans are normally subject to a monthly interest-rate penalty, calculated on the basis of the tens of thousands per month。

3. Loans from State-owned and State-owned controlled enterprises: interest rates on State-owned and State-owned enterprises are generally higher and few private enterprises or individuals are unable to lend。