The parties to the interest can freely agree as long as the agreed interest does not exceed the same period of the bankLending rates
Four times are protected by law. Even if it exceeds four times the bank's interest rate for the same period, as long as the other party is willing to give legal advice, it will not take the initiative to intervene. Only the party who owes money will not be able to repay the debt. If the party is insolvent, it will be appealed to the court and the court will judge the interest within four times. Now in our countryBank loanAnnual interest rate
5.6%, multiplied by 4, equals 22.4%, so in this range is protected by law.
"Several Opinions on People's Courts Trial on Private Lending Cases"
6. The interest rate for private lending can be appropriately higher than the interest rate of the bank. People's courts in various localities can exercise specific control over the actual situation in the region, but the maximum interest rate must not exceed four times the bank's interest rate (including the interest rate). Exceeding this limit, excess interest will not be protected.
7. The lender shall not count the interest on the principal and seek high profits. In the trial, if the creditor finds that the interest is calculated into the principal calculation and compounded, if the interest rate exceeds the limit specified in Article 6, excess interest will not be protected.
10. The fraudulent, coercive or other means of a party or the danger of a person taking the person’s life so that the other’s borrowing relationship formed in violation of the true intention shall be deemed to be invalid. If the credit relationship is invalid due to the behavior of the creditor, only the principal is returned; if the borrowing relationship is invalid and caused by the debtor’s actions, in addition to the return of the principal, interest shall be paid on the basis of the bank’s interest rate on the loan.
The interest on Article 200 of the "Contract Law of the People's Republic of China" shall not be deducted from the principal in advance. If interest is deducted from the principal in advance, the loan shall be repaid according to the actual amount of borrowing and the interest shall be calculated.