At what interest rate does lending cross the civil threshold into administrative sanctions, and at what point does it become the crime of “usurious lending in civil transactions” (Article 201 of the Penal Code)? This article analyses the 3-tier boundary — civil, administrative, criminal — how “illegal profits” are calculated under Resolution 01/2021/NQ-HDTP, and the current penalty frames.
1. What is usurious lending? (3 tiers: civil – administrative – criminal)
The law handles high-interest lending in three tiers:
- (1) Civil tier: interest above 20%/year but below 100%/year — the portion exceeding 20% is void; the borrower has no obligation to pay it;
- (2) Administrative tier: lending above the Civil Code rate in prohibited cases (pawn services, unregistered conditional business) — fines of VND 10–20 million;
- (3) Criminal tier: interest of 100%/year or more plus illegal profits of VND 30 million or more (or a prior record) — a crime under Article 201 of the Penal Code.
2. What interest rate makes lending a crime?
The civil interest cap at Clause 1, Article 468 of the Civil Code 91/2015/QH13 (effective 1 January 2017, unamended): interest is agreed by the parties but must not exceed 20%/year; any excess is void. The definition of “usurious lending” at Article 2 of Resolution 01/2021/NQ-HDTP (20 December 2021) of the Judicial Council of the Supreme People’s Court: lending at an interest rate 5 times or more the maximum rate in Clause 1, Article 468 of the Civil Code — i.e. 100%/year or more (about 8.33%/month or more; including exactly 100%/year). Lending in non-cash assets is converted to monetary value at the time of transfer.
The most common trap: thinking “lending above 20%/year is the crime of usurious lending” — WRONG. Above 20% is only a civil violation (the excess is void) and may draw an administrative fine; the crime requires 100%/year or more PLUS the illegal-profits or prior-record condition.
3. Article 201 Penal Code: elements and penalty frames
Article 201 of the Penal Code (amended by Point i, Clause 2, Article 2 of Law 12/2017/QH14, effective 1 January 2018; Law 86/2025 did not amend it):
- Clause 1: a fine of VND 50–200 million or non-custodial reform of up to 3 years — lending at 5 times or more the Civil Code maximum rate (100%/year or more), while obtaining illegal profits of VND 30 to under 100 million, or having been administratively sanctioned for this conduct / convicted of this crime, with the conviction not yet expunged, and reoffending;
- Clause 2: a fine of VND 200 million – 1 billion or 6 months – 3 years’ imprisonment — illegal profits of VND 100 million or more;
- Clause 3 (additional penalties): a fine of VND 30–100 million, prohibition from holding positions or practising for 1–5 years.
Scope: Article 201 applies only “in civil transactions”. A borrower’s voluntary acceptance of “loan-shark” rates does not exonerate the lender.
4. How are “illegal profits” calculated?
Under Resolution 01/2021/NQ-HDTP, “illegal profits” means the interest and other unlawful receipts the borrower actually paid to the lender, minus the interest corresponding to the Civil Code maximum rate (20%/year). In other words: only the excess over 20%/year actually collected counts — not the figure written in the loan paper. Interest of 100%/year or more with profits under VND 30 million may still be prosecuted where the lender was previously administratively sanctioned for the conduct.
5. Below the criminal level: how much is the fine?
Decree 144/2021/ND-CP (31 December 2021, effective 1 January 2022; replacing the expired Decree 167/2013/ND-CP), Points d and dd, Clause 4, Article 12: fines of VND 10–20 million (individuals; organisations pay double under Clause 2, Article 4) for:
- (d) Operating pawn services lending against pledged assets at rates exceeding the Civil Code ratio;
- (dd) Lending (with or without pledged assets) above the Civil Code rate without registering the conditional public-security business line.
Plus: revocation of licences/certificates for 6–9 months and mandatory disgorgement of illegal profits (Point a, Clause 7, Article 12). Note: citing Decree 167/2013 (VND 5–15 million) is wrong — that document has expired.
6. Can borrowers recover money / must they pay “loan-shark” interest?
Borrowers may still sue — but courts only protect the principal and interest within the 20%/year limit; the excess over 20% is void and the borrower has no obligation to pay it. In other words, “black credit” lenders cannot recover the loan-shark interest through legal channels.
7. Debt collection by threats or force: the added crime of extortion
Black-credit debt collection by force or threats may additionally be charged under Article 170 (extortion) — many cases are prosecuted for multiple concurrent crimes. Not every “black credit” case equals Article 201; each act must be analysed specifically.
8. App lending and online pawn: legal notes
App-based or online pawn lending without registering the conditional public-security business line draws administrative fines under Point dd, Clause 4, Article 12 of Decree 144/2021 even below the criminal threshold. Online lending models may also breach other business, advertising and personal-data-protection rules depending on the specific model.
The information above is for reference only and does not constitute legal advice.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.
