The annualized loan interest rate refers to the total interest rate with a loan term of one year.
Annual interest rate = monthly interest rate × 12 (month) = daily interest rate ×360 (day).
Assuming that the daily interest rate of a loan is 0.03%, the converted annual interest rate is 0.03%×360= 10.8%. It should be noted that there are regulations in the Supreme People's Court that the online loan interest rate is linked to LPR, and the annualized interest rate shall not exceed 4 times of the floating interest rate LPR. If it exceeds the prescribed scope, it will be regarded as usury. If it exceeds part of the agreement, it will be invalid, and the customer can choose not to pay it back.
The so-called "annualized" is to convert the daily interest rate and the monthly interest rate into the actual annual interest rate once a year, so the annualized interest rate is equal to the actual interest rate.
For example, if you borrow money from a bank to buy a house, the bank tells you that the annual interest rate is nominal, because the repayment of the loan actually bears interest on a monthly basis, and what really matters is the monthly interest rate. Nominal annual interest rate = monthly interest rate x 12, and actual annual interest rate+1=( 1+ monthly interest rate) to the power of 12.
To apply for a personal loan, you need to meet the following conditions:
China citizens with fixed residence, permanent residence or valid residence certificate at the place where the loan bank is located, under the age of 65 (inclusive) and with full capacity for civil conduct;
Have a proper occupation and stable income, and have the ability to repay the loan principal and interest on schedule; Have a good credit record and willingness to repay, and no bad credit record;
Being able to provide legal, effective and reliable guarantees recognized by the bank; There is a clear purpose of the loan, and the purpose of the loan conforms to the relevant provisions; Other conditions stipulated by the bank.
On March 3, 20021March 3 1 day, the People's Bank of China issued an announcement to make relevant provisions on the annualized interest rate of loan products.
When marketing through websites, mobile phone applications, posters and other channels, institutions engaged in loan business should show the annualized interest rate to borrowers in an obvious way. Institutions engaged in loan business include, but are not limited to, deposit-taking financial institutions, auto finance companies, consumer finance companies, microfinance companies and Internet platforms that provide advertising or display platforms for loan business.
The annualized loan interest rate is calculated according to the ratio of all loan fees charged by the borrower to the actual loan principal, and converted into annualized form. The annualized loan interest rate can be calculated by compound interest or simple interest method: compound interest is calculated by internal rate of return; If the simple interest calculation method is adopted, it should be explained that it is simple interest.