Common use of Penalty Interest and Compound Interest Clause in Contracts

Penalty Interest and Compound Interest. (1) If the Borrower fails to use the loan according to the purpose agreed herein, the lender shall have the right to charge penalty interest on the misappropriated cash from the date of misappropriation. The penalty interest rate is set out in Article 23 Special Agreement Clause 12 of this Contract; If the borrower fails to repay the loan on time and fails to reach an agreement with the lender on the extension, that is, if the loan is overdue, the lender shall have the right to charge penalty interest on the overdue loan from the overdue date. The total penalty interest rate is set out in special Clause 13 ofArticle 23 of this Contract; For the interest not paid on time (including the interest before and after the maturity of the loan, the misappropriation penalty interest and the total overdue penalty), the lender shall have the right to charge compound interest at the overdue penalty interest rate of the loan as agreed in this contract. If the same loan is overdue and not used according to the purpose agreed in the contract, the penalty interest rate shall be levied 第6页共31页 The higher rate shall be calculated (2) If the loan interest rate is fixed, the penalty interest rate is also fixed; If the borrowing interest rate adopts a floating interest rate, the penalty interest rate is also a floating interest rate, and its floating cycle is consistent with the floating cycle of the borrowing interest rate. (3) The calculation and collection ofpenalty interest and compound interest shall be carried out in accordance with the repayment method of loan interest agreed in this contract.