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Glossary

Glossary of terms commonly used in the Wallet

maximum interest rate

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How to read in Japanese: maximum interest rate
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The maximum interest rate is the upper limit of the lending interest rate set by law. The two most common laws that stipulate the maximum interest rate are the Interest Rate Restriction Act and the Capital Subscription Law.

The maximum interest rate under the Interest Rate Restriction Act ranges from 15% to 20%, depending on the loan amount. For example, if the loan is between 100,000 yen and 1,000,000 yen, the maximum interest rate is 18%. The interest rate between the maximum interest rate under the Interest Rate Restriction Act and the Capital Subscription Law is called the gray zone interest rate.

The problem of gray-zone interest rates has largely disappeared since 2010, when the law was amended to lower the maximum interest rate under the Capital Subscription Law to 20%.

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