Generally speaking, private lending is legal, but it must be within the scope permitted by law, otherwise it will not be protected.
Private lending refers to lending between citizens, between citizens and legal persons, and between citizens and other organizations. As long as the intentions of both parties are true, it can be considered as valid, and the mortgage generated by the loan is also valid accordingly, but the interest rate shall not exceed the relevant interest rate stipulated by the People's Bank of China.
According to the Contract Law of People's Republic of China (PRC)
Article 197 A loan contract shall be in written form, unless otherwise agreed between natural persons. The contents of the loan contract include the loan type, currency, purpose, amount, interest rate, term and repayment method.
Article 211 If the loan contract between natural persons does not stipulate or clearly stipulates the payment of interest, it shall be deemed as non-payment. If the loan contract between natural persons stipulates to pay interest, the loan interest rate shall not violate the relevant provisions of the state on limiting the loan interest rate.
According to the Supreme People's Court's Opinions on People's Trial of Lending Cases
Six, the interest rate of private lending can be appropriately higher than the bank's interest rate, and people around the country can grasp it according to the actual situation in the region, but the maximum interest rate shall not exceed four times (including interest rate) of similar bank loans. Beyond this limit, the excess interest will not be protected.
Extended data:
According to the Supreme People's Court's Opinions on People's Trial of Lending Cases
Seven, the lender shall not include interest in the principal to seek high profits. If it is found during the trial that the creditor included the interest in the principal to calculate compound interest, if the interest rate exceeds the limit stipulated in Article 6, the excess interest will not be protected.
8. If there is a dispute between the borrower and the lender on whether there is an agreed interest rate, and it cannot be proved, the interest can be calculated with reference to the bank's similar loan interest rate. If there is a dispute between the borrower and the borrower over the agreed interest rate, which cannot be proved, the interest may be calculated with reference to Article 6 of this opinion.
Eleven, the lender knows that the borrower is borrowing for illegal activities, and its lending relationship is not protected.