In this article, we will talk about the consequences of untimely fulfillment of a debt obligation - those as represented by the Civil Code of Russia. We will also talk in detail about how to calculate interest for using someone else's money.
Letter of the law
All the information we need contains art. 395. Consider what the Civil Code says about interest on borrowed money:
- In the event that a person unlawfully withholds someone else's money, evades repaying it to the lender, or is late in repaying the debt, interest will also be charged on the amount of his loan, which is also mandatory. Their size is determined by the Central Bank's current key rate for the current period (from 5 to 17%). The stated rules are valid if the agreement between the creditor and the credited does not imply a different amount of these percent for the use of borrowed money.
- If the losses incurred by the lender due to untimely repayment of the debt to him are greater than the interest amount from the previous paragraph, then he has every right to demand that the borrower fully repay his losses.
- Interest for the use of borrowed funds is calculated on the day the full amount is returned to the creditor, unless a contract of debt obligation or other legislative acts imply a different term.
- If the contract between the lender and the borrower stipulates a penalty for improper performance of this agreement or complete disregard thereof, the interest from the first paragraph is not recovered from the debtor. Given the fact that in the contract document there are no other conditions specifically regarding this circumstance.
- The calculation of compound interest for the use of borrowed money (adding interest on interest) by this article is not allowed unless this fact first introduces an agreement or other legislative act.
- If the amount of accrued interest clearly does not correspond to the severity of the violation of the debt obligation, the court, at the request of the borrower, may reduce it to more reasonable limits. However, even in this case, the interest on borrowed money should not be lower than specified in the first paragraph - established at a fixed rate for loans of the Central Bank of the Russian Federation.
Now we turn to the calculation of such a fine and the information necessary for this.
Calculation of interest on borrowed money
In order to use the provisions of the voiced article of the Civil Code of the Russian Federation in real business, you need to determine the following points:
- start of interest calculation;
- interest completion date;
- interest rate;
- calculation procedure.
We will analyze each of the items in detail.
Beginning of a fine
Art. 191 of the Civil Code prescribes to begin charging interest on borrowed money on the day after the date on which, according to the agreement, the loan must be repaid.
If we consider this with a specific example: Ivanov AB under a debt receipt he was obliged to return a certain amount to S. Smirnov on August 5, 2017. However, the borrower did not fulfill his obligation. Hence Smirnov S.S. has the right to claim interest on borrowed money from August 6, 2017
Interest accrual completion
The second paragraph of the Decree of the Plenum of the Higher Courts of the Russian Federation (Armed Forces and Arbitration) No. 13/14 proclaims that interest for late repayment of a loan is accrued up to a specific date - the date when the credited has fully paid off his debt.Unless a contract or other legislative act sets another term.
Continuing to consider our example, suppose that Ivanov AB returned the loan to Smirnov S.S. September 2, 2017. Consequently, the creditor is entitled to demand interest from his debtor for the period from August 6 to September 2, 2017 inclusive.
Interest rate
Article 395 (Clause 1) specifically establishes the amount of the penalty - interest for the use of other people's money. It corresponds to the rate of the Central Bank of Russia on the day when the debt was actually paid. In this case, the rate that is set for the region where the debtor is an individual, or the borrower is a legal entity, is valid.
Clause 51 of the Decree of the Plenum of the Higher Courts No. 6/8 to address some of the inconsistencies arising from the reading of Clause 1 of Article 395 of the Civil Code prescribes that the amount of accrued interest should be equal to the current refinancing rate set by the Central Bank of the Russian Federation for commercial banking organizations on credit resources. To find out about its size is easiest on the official website of the Central Bank of Russia.
And again we turn to our example. Since June 2017, the CBR has set the key rate to 9% per annum. Consequently, Ivanov A.B. will pay interest to its creditor, taking into account this amount.
Calculation of interest on delay
Resolution No. 13/14 of the Plenum of the Supreme Courts of the Russian Federation prescribes that when taking into account interest at the Central Bank of the Russian Federation, the default is 360 days per year, and 30 days a month from here - 30.
From here we can derive the following convenient formula:
P = (SR x D x BH) / 36 000. Decoding:
P - the amount of interest for the late return of the occupied amount.
SR - refinancing rate established by the Central Bank.
D - the size of the debt.
BH - the number of days of delay, including the one when the debt was directly paid in full to the creditor.
36,000 - 360 days a year, multiplied by an indicator that shows the share of one percent.
Practical calculation example
Let us make some clarifications in the example that was presented throughout the article, namely, the amount that A. Ivanov borrowed from Smirnov S.S. Let it be 100 thousand rubles. Now we have all the information to substitute in the formula:
SR = 9% from June of this year - relevant on September 2, 2017.
D = 100,000 rubles.
BH = 28 (from August 6 to September 2 inclusive).
Substitute these numbers in the calculation formula:
(9 x 100,000 x 28) / 36,000 = 700.
From here we get that Ivanov A.B. at the time of repayment of the debt to Smirnov S.S. for a delay of payment of 28 days must pay the total amount to the creditor 100 700 rubles (100 000 + 700).
In this article, we examined one of the easiest examples of calculating interest on late payment of a debt obligation. In some cases, it is complicated by partial repayment of the debt, as well as monthly payments-rewards to the creditor for the loan. Such calculations are best done not independently, but with the help of numerous online calculators presented on the Web.
Untimely provision of the amount borrowed, unless otherwise agreed by the loan agreement, is punishable by the calculation of interest for deduction of other people's money for each day delayed by agreement. Remember that this penalty is charged until the full repayment of the debt to the lender.