2. This provision has been replaced by the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases", and the annual interest rate has been changed to no more than 24%;
3. Legal basis: Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases.
One; Article 28 After both borrowers and borrowers settle the principal and interest of the previous loan, they will include the interest in the principal of the latter loan and issue a new certificate of creditor's rights. If the previous interest rate does not exceed the annual interest rate of 24%, the amount specified in the reissued creditor's rights certificate can be confirmed as the later loan principal. Excess interest cannot be included in the future loan principal. If the agreed interest rate exceeds the annual interest rate of 24%, and the parties claim that the excess interest cannot be included in the later loan principal, the people's court shall support it. According to the provisions of the preceding paragraph, the sum of the principal and interest payable by the borrower after the expiration of the loan term cannot exceed the sum of the initial loan principal and the interest of the whole loan term calculated at an annual interest rate of 24% based on the initial loan principal. If the lender requests the borrower to pay the excess, the people's court will not support it. The interest rate of private lending can be appropriately higher than the bank's interest rate, and the local people's courts can specifically 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.
Second; Many fund demanders are very casual when signing bank loan agreements. In fact, this natural and unrestrained behavior shows that they lack a good sense of financing and financial management, and often pay more interest when lending, resulting in artificially "high interest rates." Because some banks' loan forms will make fund demanders pay more interest invisibly. For example, loans that retain the balance of deposits and loans that withhold interest. The so-called retained deposit balance loan means that when the fund demander obtains a loan from the bank, the bank requires him to retain a part of the loan principal and deposit it in the bank account, so as to limit the fund demander from repaying the loan principal and interest on schedule. But for those who need funds, the discount of the loan principal is equivalent to paying more interest. The so-called interest deduction loan means that some banks deduct all the loan interest from the lender's principal when issuing loans to ensure that the loan interest can be repaid on time. Because this method will reduce the loan funds available to the fund demanders and objectively increase the financing cost of the fund demanders.