Loan interest: the loan interest rate shall be subject to the loan interest rate of the same period and grade specified by the People's Bank of China, and the expected annualized interest rate of pledged loans shall be subject to the benchmark expected annualized interest rate of the same period and grade specified by the Central Bank, but it shall not exceed four times the benchmark expected annualized interest rate of the same period. The expected annualized interest rate is 4.35% for one year or less, 4.75% for one year to five years (inclusive) and 4.90% for more than five years.

Calculation method of pledged loan interest

For example, the applicant wants the bank to apply for a pledge loan of 20,000 yuan, with a loan term of 12 months and an annual interest rate of 4.75%.

Interest calculation of average capital repayment method

Monthly principal and interest repayment amount = (principal/repayment months)+(principal-accumulated repaid principal) × monthly interest rate.

Monthly repayment of principal and interest =(20000/ 12)+(20000- accumulated repaid principal) ×3.958‰

Repayment in the first month =(20000/ 12)+(20000- accumulated principal paid) ×3.958‰= 1746.

Monthly principal = total principal/repayment months

First repayment principal: 20000/ 12= 1667.

Monthly interest = (principal-accumulated principal repayment) × monthly interest rate

First interest: (20000- 1667)×3.958‰=79.

Total repayment interest = (repayment months+1)* loan amount * monthly interest rate /2.

Total repayment interest: (12+1) * 20000 * 3.958 ‰/2 = 514.54.