Generally, we can get the "annual interest rate" by multiplying the "monthly interest rate" by 12, and we can get the "monthly interest rate" by dividing it by 12.
1. Let's take an example: suppose that the principal of a loan is 654.38 million yuan, the term is 12 months, and the annual interest rate is 6% (that is, we commonly call it 6 points). Then, its monthly interest rate is 6%/ 12=0.5%, which is commonly known as "5% monthly interest rate". On the contrary, when the monthly interest rate is known to be 0.5%, the annual interest rate of the loan can be 6% with 0.5%* 12. It is worth noting that this simple conversion method is only applicable to loans from regular banks, and the repayment method of loans is equal principal and interest or interest before principal. Credit card installment and interest conversion of loans from non-bank institutions are not applicable.
2. Suppose the monthly interest rate of a bank's credit card is 0.5% (note that this is the monthly interest rate, not the monthly interest rate), then the annual interest rate is 0.5%* 12=6%? That's not true. For this kind of installment loan, because of its repayment method, the principal is repaid in each installment, but the interest is still calculated according to the total principal in the next installment, so the annual interest rate cannot be calculated simply by the monthly interest rate * 12.
3. The actual annual interest rate should be: annual interest rate = single-period handling fee rate * number of periods *24/ (number of periods+1). If the monthly interest rate of 0.5% is substituted into the formula, the actual annual interest rate 1 1% can be obtained. Therefore, in the conversion of annual interest rate and monthly interest rate, it is necessary to distinguish according to the repayment method: for general bank loans, annual interest rate = monthly interest rate * 12. For bank credit card installment and loans from non-bank financial institutions, the annual interest rate = single-period handling fee rate * number of periods *24/ (number of periods+1)
4. For private lending, if the annual interest rate agreed by both parties exceeds 36%, the interest agreement in excess is invalid. Article 26 of the judicial interpretation clearly stipulates: "If the interest rate agreed between the borrower and the borrower does not exceed the annual interest rate of 24%, and the lender requests the borrower to pay interest at the agreed interest rate, the people's court shall support it. If the agreed interest rate exceeds 36% per year, the agreement is invalid. If the borrower requests the lender to return interest exceeding 36% per annum, the people's court shall support it. "