Legal basis: Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases.
Article 24 If the borrower and the lender have not agreed on interest, and the lender claims to pay interest, the people's court will not support it.
If the interest agreement between natural persons is unclear and the lender claims to pay interest, the people's court will not support it. Except for the loan between natural persons, if the agreement on the loan interest between the borrower and the lender is unclear, and the lender claims interest, the people's court shall determine the interest according to the contents of the private loan contract, the local or the parties' trading methods, trading habits, market quotation and other factors.
Article 25 If the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except that the interest rate agreed by both parties exceeds four times the market quotation of one-year loan at the time of the establishment of the contract.
The "one-year loan market quotation" mentioned in the preceding paragraph refers to the one-year loan market quotation issued monthly by the National Interbank Funding Center authorized by the People's Bank of China from August 20th, 20th, 20th19th.
Article 26. The loan amount specified in debt certificates such as IOUs, receipts and IOUs is generally recognized as the principal. If interest is deducted from the principal in advance, the people's court shall confirm the actual amount lent as the principal.
Article 27 After the borrower and the borrower settle the loan principal and interest in the early stage, the interest shall be included in the loan principal in the later stage, and the creditor's rights certificate shall be reissued. If the interest rate in the early stage does not exceed four times the market quotation of the one-year loan when the contract is established, the amount specified in the reissued creditor's rights certificate can be confirmed as the loan principal in the later stage. The overcharged interest shall not be used as the loan principal in the future.
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 at four times the quoted interest rate of the one-year loan market when the contract is established, the people's court will not support it.
Article 28 If the borrower and the lender have an agreement on overdue interest rate, such agreement shall prevail, but it shall not exceed four times the market interest rate of one-year loan at the time of the establishment of this Contract.
If the overdue interest rate is not agreed or clearly agreed, the people's court may handle it according to different circumstances:
(a) the people's court shall support the lender's claim that the borrower should bear the liability for breach of contract for overdue repayment with reference to the interest calculated by the one-year loan market at that time from the date of overdue repayment;
(2) If the interest rate during the loan period is agreed, but the overdue interest rate is not agreed, the people's court shall support the lender to claim that the borrower shall pay the interest during the capital occupation according to the interest rate during the loan period from the date of overdue repayment.