Legal basis: Article 680 of the Civil Code of People's Republic of China (PRC) prohibits high-interest lending, and the loan interest rate shall not violate the relevant provisions of the state.
If there is no agreement on the payment of interest in the loan contract, it shall be deemed that there is no interest.
If the loan contract does not specify the method of interest payment, and the parties cannot reach a supplementary agreement, the interest shall be determined according to the local or the parties' trading methods, trading habits, market interest rates and other factors; Loans between natural persons are regarded as having no interest.
"Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases" Article 27 After the principal and interest of the previous loan are settled, both borrowers and lenders will include the interest in the latter loan principal and reissue the creditor's rights certificate. If the previous interest rate does not exceed four times the quoted interest rate of the one-year loan market when the contract is established, the amount stated in the re-issued creditor's rights certificate can be confirmed as the future loan principal. The excess interest shall not be recognized as the future loan principal.
According to the calculation in the preceding paragraph, if the sum of the principal and interest that the borrower should pay after the expiration of the loan term exceeds the sum of the interest of the whole loan term based on the initial loan principal and calculated according to the quoted interest rate of the one-year loan market at the time of the establishment of the contract, the people's court will not support it.