[Reasons for Recognition] Judgment without Oral Proceedings (Article 208 (3) 1 of the Civil Procedure Act)

2. Determination on claims for damages for delay in excess of the interest limitation rate

A. If the interest or delay interest rate stipulated in the conclusion of a monetary loan agreement exceeds the maximum interest rate permitted under the Interest Limitation Act, the agreement on the interest and delay interest rate of the portion exceeding the maximum interest rate is null and void as it constitutes a juristic act with a content contrary to good morals and other social order, since the lender gains unjust enrichment by taking advantage of his superior position and the borrower bears an excessive and unfair burden (see Supreme Court en banc Decision 2004Da50426, Feb. 15, 2007; Supreme Court Decision 2018Da22350, Jun. 28, 2018).

The maximum interest rate under the former Interest Limitation Act enacted by Act No. 8322 on March 29, 2007 (amended by June 30, 2007) is 40% per annum; the maximum interest rate under the former Interest Limitation Act amended by Act No. 10925 on July 25, 2011 (amended by Act No. 10925, Oct. 26, 201) was 30% per annum; however, the maximum interest rate under the former Interest Limitation Act was 1227 on January 14, 2014 (amended by Act No. 12227, Jul. 15, 2014).

(2) The highest interest rate under paragraph (1) means the interest rate agreed upon.

(3) A contractual interest exceeding the maximum interest rate prescribed in paragraph (1) shall be null and void.

(4) Where a debtor has voluntarily paid interest exceeding the maximum interest rate, the amount equivalent to the interest paid in excess shall be appropriated for the principal, and where the principal is extinguished, he/she may claim the return thereof.

Article 2 (1) of the former Interest Limitation Act.