Calculation of interest according to the provisions of the people's Bank of the standard, 1

In July 1, 1995 the provisions overdue loan interest rates for four days at six

-- release date: August 18, 1995; number: silver (1995) No. 237; Name: "notice on the adjustment of the interest bearing loan interest rates after the"

Overdue loan interest rates from May 1, 1996 to date at six to 4/10000
-- release date: May 2, 1996; number: silver (1996) No. 156; Name: "Notice of the people's Bank of China about reducing financial institutions deposit, loan interest rates"

In December 7, 1998 the overdue loan interest rate from 4/10000 to 3/10000
-- release date: December 5, 1998; number: silver (1998) No. 586; Name: "Circular on reducing deposit, loan interest rates"

In June 10, 1999 the overdue loan interest rate from day 3/10000 to day 2/10000 point adjustment (7.56% at an annualised rate)
-- release date: June 9, 1999; number: silver (1999) No. 192; Name: "the people's Bank of China Circular on reducing deposit, loan interest rates"

In January 1, 2004 overdue loan interest rates from 2/10000 point adjustment is charged in the loan contract specified in the loan interest rates 30%-50%
-- release date: December 10, 2003; number: silver (2003) No. 251; Name: "Notice of the people's Bank of Chinese on issues related to the RMB loan interest rates"

(Appendix: "in December 10, 2003 the people's Bank of China on lending rates notice" (Yinfa No. [2003]251) Notice Quan Wen)
The people's Bank of China all branches, business management departments, all policy banks, state-owned commercial banks, joint-stock commercial banks:
In order to steadily promote market-oriented interest rate reform, give full play to the regulating role of the interest rate lever. The relevant matters concerned calculation and settlement of Renminbi loan interest and so on are notified as follows:
One, about RMB loan interest and interest settlement problems. RMB loans (excluding individual housing loan) interest bearing and settlement methods, by lending to determine negotiation.
Two, on loan during the term of the contract interest rate adjustment problems. The yuan, long-term loan interest rate from a year, instead of borrowing both sides according to commercial principles, can adjust the monthly, quarterly, annually during the term of the contract, also can be used to determine the fixed rate.
More than 5 year grade loan rates, determined by independent financial institutions by the people's Bank of China announced more than 5 year lending rate.
Three, the problem about the penalty interest rate. Overdue loans (where the borrower fails to repay the loan according to the contract date) would impose a punitive interest rates from the current daily 2/10000 volume of interest, to be 30%-50% in the loan contract specified in the loan interest rates; the borrower fails to use the loan contract agreed to impose a punitive interest rate from the current 5/10000, daily interest received, to pay the loan contract specified loan interest rate 50%-100%.
The overdue or the contract fails to use the loan loan, from the late or not according to the contract to use the loans to date, according to impose a punitive interest rate of recovery of interest, pay interest until now. To not pay interest, by impose a punitive interest rate of recovery of profits. 　　
Four, on January 1, 2004 (including January 1, 2004) after the release of the new loans according to this notice. On January 1, 2004 before the payment of the outstanding loans are still performed in the original loan contract, but borrowing by both parties agreed, also can be the implementation of this notice. 　　
Five, this Circular shall be implemented as of January 1, 2004. Provisions on RMB loan interest rates after the people's Bank issued the inconsistent with this notice, this notice shall prevail.

Loan interest rates

In accordance with the provisions of the 2005 March release of "the people's Bank of Chinese on the adjustment of housing credit policies of commercial banks and the excess reserve deposit rates notice": "individual housing loans overdue (the borrower not according to the contract date of repayment) implementation of commercial loans impose a punitive interest rate from the current 2/10000, daily volume of interest to pay the loan contract specified the loan interest rate 30%-50%." (see table below). This policy will improve the individual payment by the amount of penalty interest, warning and curb some of those malicious real arrears.
At the same time, some city housing fund management center is on the basis of the notice issued, the city housing provident fund housing loans overdue impose a punitive interest rate. For example, "Beijing city housing fund management center of individual housing loans secured by way of" document: "personal loans overdue implementation would impose a punitive interest rates from the current daily 2/10000 volume of interest to be in the" Beijing housing provident fund management center for individual housing loans secured by the "loan contract specified in the loan interest rates 50%.". Shanghai housing provident fund management center is not unified regulation for adjustment, but the introduction of a provident fund interest rates policy, by the banks with reference to the central bank document, to determine the penalty scheme.
So the city housing provident fund interest rate policy is not the same.
In the past, whether commercial loans or loan of housing accumulation fund, implementation would impose a punitive interest rates daily 2/10000 points (0.021%), is fixed. While the new penalty interest rate and loan interest rates began to hook, changed the previous algorithm. This creates an interesting effect: because of the commercial loan interest rate is obviously higher than that of the housing accumulation fund loan interest rates, so the new penalty interest rates after the release, whether it is subject to 30%, or 50% extra interest, commercial loans impose a punitive interest rates rise and the housing provident fund, impose a punitive interest rate decreases.
Mortgage interest rates in accordance with the loan contract specified in the loan interest rate based on the float by 30% to 50%. This gives banks a certain autonomy, all commercial banks in the range independent floating impose a punitive interest rate. Their own floating would impose a punitive interest rates within specified limits.
But since the central bank only provides calculation would impose a punitive interest rates and floating ranges, but did not specify how to calculate the penalty, and appear on the market the two methods for calculating the overdue penalty interest: interest calculation method and the power of compound interest method.
A method to calculate the interest:
Simple interest is constant, so the interest will not because of the time delay caused by the interest earning interest situation. At present, most banks are using this method of simple calculation of interest.
For example, if a borrower fails to pay the $3000 payment, interest rate preferential loans for 5.814% years now, if charged based on the interest rates on the 30% would impose a punitive interest rates, then the year would impose a punitive interest rate is 5.814% X (130%) = 7.558%, Japan would impose a punitive interest rate is 7.558% / 360 (day) = 0.020994%. Delayed repayment of a month the lender will accept the penalty of about 18.89 yuan.
If the execution of penalty interest in accordance with the loan interest rate 50% of the peak hour standard, then the penalty rate for 5.814% X (150%) = 8.721%, Japan would impose a punitive interest rate is 8.721% / 360 (= 0.024225% days), the monthly repayment amount is 3000 yuan circumstances, delay repayment of a month the lender will accept the penalty of about 21.80 yuan.
A method for calculation of compound interest:
Compound interest interest is increasing, so the penalty will be because of the time delay caused by the interest earning interest situation. There are methods of individual bank uses this kind of compounding interest.
Using this method, interest is to separate the principal and interest repayment to calculate each. The principal part of outstanding according to simple way of calculating the penalty, and some outstanding interest calculated in accordance with compound interest interest.
For example, if a borrower fails to pay the $3000 payment, 3000 yuan payment of 1200 yuan to the principal, 1800 yuan interest, loan interest rate of 5.508%, the penalty rate for 8.262% (=5.508% × (1 + 50%)). If the borrower repayment for two days, 1200 yuan principal part according to 0.02295% (=8.262% / day for 360 days) the interest received, two days of interest is 0.5508 yuan; 1800 yuan interest according to the 0.02295% part of the recovery of profits, the first day of the interest is 0.4131 yuan, second days of interest is (18000.4131) * 0.02295%, 0.4132 yuan. A total of two days per 1.3771 yuan.
Here the more controversial is the interest of. Is a year of 360 days would impose a punitive interest rate (calculated in accordance with the provisions of the people's Bank loan interest each year when the days), 365 days (or in accordance with the provisions of the people's Bank of deposit interest at the annual number of days), or 364 days (days biweekly for the annual interest). With the increasingly rich variety of loans, interest each year about whether it is necessary to re open days worth considering.
In view of the penalty for deliberate default behavior, banks to determine whether intentional behavior is not the same. For example if you allow a few days there will be Bank of grace, grace period in accordance with the loan interest rate penalty, if more than a grace period, would start to impose a punitive interest rate calculation would impose a punitive interest. The grace period is generally 5 days to 15 days. So the borrower finds delays, to communicate with the bank as soon as possible, so as to avoid heavy fines and lower credit rating.