I. Legal grounds

– Civil Code 2015;

– Criminal Code 2015;

– Decree 144/2021/ND-CP on sanctioning of administrative violations in the field of social security, order and safety; Prevention of social evils; fire protection; rescue and rescue; domestic violence prevention and control.

II. Legal opinion

1. Effect of loan transaction

According to the provisions of Article 463 of the Civil Code 2015: “A property loan contract is an agreement between parties whereby the lender delivers the property to the borrower; when the repayment is due, the borrower must return to the lender property of the same type in the correct quantity and quality and only pay interest if so agreed or prescribed by law.

Thus, your money lending transaction is a property loan transaction with an agreed upon interest rate. For this transaction to take effect, the asset loan agreement must satisfy the conditions specified in Clause 1, Article 117 of the 2015 Civil Code, specifically:

a. Borrowers and lenders have civil legal capacity and civil act capacity in accordance with established civil transactions;

Regarding legal capacity: According to the provisions of Article 19 of the Civil Code 2015, every individual has legal capacity from birth to death. Thus, both the borrower and the lender have legal capacity.

Regarding civil act capacity: According to the provisions in Articles 20 and 21 of the Civil Code 2015, age is a factor determining an individual’s civil act capacity. If both the borrower and the lender are at least 15 years old, the two parties are completely free to agree to borrow money. If the borrower or lender is under 15 years of age, the consent of that person’s legal representative is required to make this transaction.

b. Both the lender and the borrower are completely voluntary;

c. The purpose and content of the civil transaction do not violate the prohibition of the law and do not violate social ethics.

When your transaction meets the above conditions, the transaction will be valid. However, the loan interest rate and loan term should be considered in this transaction.

2. Loan interest rate

According to the provisions of Clause 1, Article 468 of the 2015 Civil Code: “If the parties have an agreement on the interest rate, the agreed-upon interest rate must not exceed 20%/year of the loan amount…”

Thus, customers can agree on the loan interest rate but must not exceed 20% of the loan amount.

According to the information provided, customers are making a loan transaction with an interest rate of 5%/month, equivalent to 60%/year. The interest rate you are applying is 3 times higher than the maximum interest rate allowed by law to be agreed upon by the parties.

According to the provisions of Clause 1, Article 468 of the Civil Code 2015: “In case the agreed interest rate exceeds the limit interest rate specified in this Clause, the excess interest rate will not take effect”. Thus, the excess interest equivalent to 40%/year of the loan amount will not be valid.

In addition, according to the provisions of Point dd, Clause 4, Article 12 of Decree 144/2021/ND-CP on sanctioning of administrative violations in the field of social security, order and safety; Prevention of social evils; fire protection; rescue and rescue; For domestic violence prevention and control, customers may be administratively fined from VND 10,000,000 to VND 20,000,000 for failing to register business lines with conditions on security and order that lend money to customers. money with a lending interest rate exceeding the interest rate prescribed by the Civil Code.

In addition, the criminal law has provisions on crimes related to the act of lending heavy interest, so it is necessary to consider whether your behavior will be prosecuted for criminal responsibility or not?

According to the provisions of Article 201 of the Criminal Code 2015: “Anyone who, in a civil transaction, lends at an interest rate 5 times higher than the highest interest rate prescribed in the Civil Code, gains illicit profits from 30,000,000 VND 100,000,000 or less, or have been administratively sanctioned for this act or have been sentenced for this crime, not yet entitled to criminal record remission but continue to commit it, shall be subject to a fine of between VND 50,000,000 and 200,000. .000 VND or non-custodial reform for up to 3 years”.

According to the above regulations, when customers lend at an interest rate 5 times higher than the maximum interest rate according to the Civil Code, it is equivalent to 100% interest per year of the loan and earns an illegal profit from VND 30 million. less than 100 million dong or has been administratively sanctioned for this act or has been convicted for this crime, has not yet been expunged, but continues to violate, the new customer will be examined for penal liability for the crime. heavy interest loans. In your case, the loan interest rate is only 3 times higher than the maximum interest rate according to the civil code, so there is no need to consider criminal liability but only administrative sanctions as analyzed above.

3. Loan term

Customers have not provided messages related to the loan agreement, so we have not yet determined whether this transaction is a term or non-term loan transaction.

According to the provisions of Clause 1, Article 469 of the Civil Code 2015: “For a loan contract with no term and no interest, the lender has the right to reclaim the property and the borrower also has the right to repay the debt at any time. at any time, but must notify each other in advance a reasonable time, unless otherwise agreed. Thus, if the customer does not agree on the loan term, the customer can reclaim the loan amount at any time but must notify the borrower a reasonable period of time in advance.

If the customer has an agreement on the loan term, when it is time to pay the debt, the borrower is obliged to return the borrowed amount.

Above is the legal advice of Khoa Tin Law. In case you need more information, please call us immediately at 0983.533.005 for a free consultation.

Best regards.