When private lending institutions handle loan business, they often hear that interest is a few cents or a few cents. Generally, private lending is calculated by points or points. Usually, 5% means that the monthly interest rate of the loan is 0.5%. However, some institutions refer to the daily interest rate. Therefore, when handling private lending, if the interest rate is 5%, then the borrower must see clearly whether the interest rate agreed in the loan contract is the monthly interest rate or the daily interest rate. The interest rate under different circumstances is quite different from the interest that the borrower needs to pay.

Take the loan 1 000 yuan and the loan term 1 year as an example. Usually, 5% is the monthly interest rate, with one month's interest in 50 yuan and one year's interest in:10000 * 0.5% *12 = 600 yuan. 5% monthly interest is converted into annual interest rate, which is 0.5% * 65433.

If 5% is the daily interest rate, it means that the daily interest rate is 0.5%. If you borrow 1 10,000 yuan, one day's interest will be 50 yuan, and 5% of the daily interest rate will be converted into annual interest rate 180%, and the interest to be paid for one year will be 18000 yuan, and the repayment interest will be higher than the principal. This interest rate is already usury, which is illegal. Therefore, borrowers should pay attention to see clearly that if they borrow usury, the interest that users need to pay is not small.