Legal basis: Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases Article 26 If the interest rate agreed by both borrowers and lenders does not exceed 24% per annum, the people's court shall support it.
The interest rate agreed between the borrower and the borrower exceeds the annual interest rate of 36%, and the interest agreement in excess is invalid. The people's court shall support the borrower's request to the lender to return the part of the interest paid that exceeds 36% per annum.
Article 20 of the Regulations on the Administration of RMB Interest Rate: Short-term loans (with a term of less than one year, including one year) shall bear interest according to the legal loan interest rate of the corresponding grade on the signing date of the loan contract. During the loan contract period, in case of interest rate adjustment, interest will not be calculated by installments.
Short-term loans are settled quarterly, and the 20th day of the last month of each quarter is the settlement date; If the interest is settled on a monthly basis, the 20th of each month is the interest settlement date. The specific interest settlement method shall be determined by the borrower and the lender through consultation. Interest that cannot be paid on schedule during the loan period shall be compounded quarterly or monthly according to the loan contract interest rate, and after loans overdue, at the default interest rate. When the last loan is paid off, the profit will be paid off with the principal.
Twenty-first medium and long-term loans (with a term of more than one year) have a fixed interest rate of one year. The loan (including all the funds that should be allocated by installments within one year from the effective date of the loan contract) bears interest according to the legal loan interest rate of the corresponding grade on the effective date of the loan contract, and one year later, the interest rate of the next year is determined according to the legal loan interest rate of the corresponding grade at that time (the first loan is paid by installments). Medium and long-term loans are settled quarterly, and the 20th of the last month of each quarter is the settlement date. The interest that cannot be paid on schedule during the loan period shall be compounded quarterly according to the contract interest rate, and after loans overdue, it shall be compounded at the default interest rate.
Twenty-fifth overdue loans or misappropriation of loans, from the date of overdue or misappropriation, interest will be calculated at the default interest rate until the principal and interest are fully paid off. In case of adjustment of the default interest rate, interest will be calculated in stages. Interest that cannot be paid on schedule during loans overdue or misappropriation shall be compounded quarterly (short-term loans can also be monthly) according to the penalty interest rate. Just like loans overdue's misappropriation, we should choose carefully and not combine.