How much of the penalty written in the private lending contract is legal?

I Private Loan Contract Written Liquidated damages How much is legal?

Legally, the liquidated damages written in the private loan contract are legal as long as they do not exceed 30% of the principal.

After the contract is signed, the liquidated damages and the amount and payment method of the liquidated damages can be agreed in the contract. If the liquidated damages are not paid after the breach of contract, the party can apply to the arbitration institution for arbitration or bring a lawsuit in the court.

The liquidated damages shall be a certain amount of liquidated damages paid to the other party according to the circumstances of the breach of contract. The calculation method of the amount of compensation for losses arising from the breach of contract may also be stipulated. If there is no agreement on liquidated damages Deposit If the amount exceeds 20% of the amount of the subject matter of the main contract, the people's court shall not support it.

2、 Private lending contract dispute How to deal with it?

（1） The parties may settle their contractual disputes through conciliation or mediation.

（2） If the parties are unwilling to settle or mediate, or if the settlement or mediation fails, they may apply to an arbitration institution for arbitration in accordance with the arbitration agreement.

（3） If the parties have not concluded an arbitration agreement or the arbitration agreement is invalid, they may bring a suit in a people's court.

The People's Republic of China Civil Code 》

Article 233 Where a real right is infringed, the right holder may, through conciliation, mediation, arbitration litigation And so on.

Article 234 Where a dispute arises over the ownership and content of the real right, the interested party may request confirmation of the right.

Article 235 Where a person has no right to possess a realty or chattel, the right holder may request the return of the original object.

Article 236 Where a real right is impaired or may be impaired, the obligee may request the elimination of the impairment or danger.

Article 237 Where a realty or chattel is damaged, the obligee may request to repair, redo, replace or restore the original state according to law.

Article 238 Where a real right is infringed upon and causes damage to the obligee, the obligee may claim damages according to law, or claim to assume other responsibilities according to law civil liability 。

If there is a dispute over a private lending contract, the two parties can negotiate first, and if not, apply for arbitration. If they are not satisfied with the arbitration result, they can apply to the people's court for civil action.