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Muluki Civil Code 2074 (मुलुकी देवानी संहिता)10% Statutory CeilingNo Compound Interest (चक्रवृद्धि ब्याज निषेध)

Nepal Legal Interest Calculator

Compute statutory 10% per annum court judgment interest, commercial debt accruals, and decreed payout totals under the Muluki Civil Code 2074 for civil execution and contract disputes.

1. Judgment & Loan Principal

Enter the principal debt amount, decreed settlement, or contract default sum.

NPR
Years
Months
Days
Accrued Interest AssessmentSimple Interest Only

Total Statutory Interest Accrued

NPR 200,000

Computed at 10% p.a. over 2.00 years.

Principal AmountNPR 1,000,000
Accrued Judgment Interest+ NPR 200,000
Grand Decreed Total (Principal + Interest)NPR 1,200,000
Daily Continuing Accrual Rate:NPR 274 / day
Legal Framework

Statutory Interest Rules Under Nepal Civil Code 2074

The Muluki Civil Code 2074 (Section 478 and related provisions) established clear principles regarding lending rates and court execution interest.

Section 478(1)

10% Ceiling on Lending

In any private loan or transaction agreement, the annual interest rate cannot exceed 10% per annum. Any contractual rate above 10% is void and unenforceable.

Section 478(2)

Prohibition of Compound Interest

Capitalizing accrued interest into the principal (Sawa Ma Gabhne / Chakrabriddhi) is explicitly prohibited by law. Interest must always be computed on the original principal sum.

Section 478(3)

Total Interest Cap

Total recovered interest cannot exceed the principal amount itself, regardless of how many years the debt has remained outstanding (Damdupat principle).

How to Calculate Decreed Legal Interest in Nepal

Standard procedure applied by court execution officers (Tahasil Karyalaya) for calculating post-judgment interest.

01

Verify the Judgment Decree Date

Find the exact date the court pronounced the decree or the date debtor defaulted under the agreement.

02

Apply 10% Simple Interest Rate

Calculate simple interest at 10% per annum (I = P × 0.10 × Years). Do not compound unpaid interest into the principal.

03

Check Damdupat Ceiling

Ensure the total accumulated interest does not exceed 100% of the principal sum under Section 478(3).

04

Submit in Execution Application

Include the detailed interest statement with your Faisala Karyannayan (Decree Execution) petition before the District Court.

Frequently Asked Questions

Questions About Nepal Legal Interest Rules

No. Under Section 478(1) of the Muluki Civil Code 2074, the maximum permissible interest rate on private loans or debt instruments is 10% per annum. Even if a promissory note (Tamassuk) writes 24% or 36%, Nepal courts will strictly reduce the enforceable interest to 10%.

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