The Supreme People's Court of Vietnam: Benchbook Online

Main tasks and practical skills:

This is a type of contract which includes an agreement for the payment of interest having an identified interest rate. The Judge should consider and resolve the payment of the original debt, interest debt which includes interest rate and duration of interest calculation.

• With respect to a contract for a loan with a definite term, the interest of the overdue debt shall be calculated from the expiry of the loan term. With respect to a contract with an indefinite term, the interest of the overdue debt shall be calculated as from the date when the debt is required to be paid (disputes arise).
• The Judge should distinguish a contract entered prior to 1 July 1996 from a contract entered after 1 July 1996. With respect to the former, only the interest paid after 1 July 1996, not the interest paid prior to 1 July 1996 shall be resolved again. With respect to a contract transacted after 1 July 1996, its interest must be adjusted in accordance with legal provisions.
• Due interest shall not exceed 150% of the maximum interest rate announced by the State Bank for the corresponding loan at the time when the loan is made.
• Interest of overdue debt shall be equivalent to 150% of the maximum loan interest rate at the time when the hearing of first instance is conducted and the interest shall be calculated as from the date when the debt becomes overdue to the date when the hearing of first instance is conducted. Noting that the calculation of  interest against different periods has been repealed..
• The interest shall be incorporated into the original debt once with respect to a definite term loan in circumstances where the borrower is unable to repay the debt upon expiry of the loan term.
• In fact, the repayment of a debt often occurs as many instalments. Each instalment is firstly taken to pay for the interest and then for the original debt.
• Noting that the Bank has not regulated any framework for loan interest rates in recent years. It only regulates basic interest rates and it should affix a level of overdue interest equivalent to 150% of the basic interest.