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Terminology introduction

state rate

The interest rate set by the People's Bank of China approved by the State Council and authorized by the State Council is the legal interest rate. The announcement and implementation of the statutory interest rate shall be the responsibility of the head office of the People's Bank of China.

benchmark interest rate

The deposit and loan interest rates of the People's Bank of China to commercial banks and other financial institutions are the benchmark interest rates. The benchmark interest rate is determined by the head office of the People's Bank of China.

contractual rate of interest

The lender shall make an agreement with the borrower according to the statutory loan interest rate and the floating collusion range stipulated by the People's Bank of China, and specify the interest rate of the specific loan in the loan contract.

loan rate

Bank loan interest rate refers to the ratio of interest amount to principal amount during the loan period. The interest rate of loan contracts with banks and other financial institutions as lenders can only be determined through consultation within the upper and lower limits of interest rates stipulated by the Bank of China. If the loan interest rate is high, the repayment amount of the borrower will increase after the loan term, otherwise it will decrease.

compound interest

Compound interest means adding interest at a certain interest rate. According to the regulations of the central bank, if the borrower fails to repay the interest at the time agreed in the contract, it will be charged with compound interest.

interest default

If the lender fails to repay the bank loan within the prescribed time limit, the bank will call the penalty interest paid to the non-defaulting party according to the contract signed with the parties as the bank penalty interest.

Loans overdue liquidated damages

The nature is the same as the penalty interest, and the penalty measures for the breaching party.

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Loan interest rate and interest

The General Rules for Loans stipulates that:

(1) Determination of loan interest rate: The lender determines the interest rate of each loan according to the upper and lower limits of loan interest rate stipulated by the People's Bank of China, and specifies it in the loan contract;

(II) Collection of loan interest: Lenders and borrowers shall collect or pay interest on schedule in accordance with the loan contract and relevant interest-bearing provisions of the People's Bank of China. When the loan extension period plus the original term reaches the new interest rate grade, it will be charged at the new term grade interest rate from the date of extension. Penalty interest is charged for overdue loans according to regulations.

(3) Loan interest subsidy: According to the national policy, in order to promote the economic development of certain industries and regions, the relevant departments may subsidize the loan interest. Loans subsidized by relevant departments shall be independently examined and issued by the undertaking bank, and strictly managed in accordance with the relevant provisions of the General Rules for Loans.

(4) Loan suspension, interest reduction and interest-free loans: Except as stipulated by the State Council, no unit or individual has the right to decide to stop lending, reduce interest and interest-free. The Lender shall, according to the decision of the State Council, specifically handle the cessation, interest reduction and interest-free according to the scope of duties and authority.

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Loan interest settlement

Small farmers' loans of rural credit cooperatives shall be paid off with profits. If it is a cross-year loan, the interest must be settled in one lump sum before the end of the year. The interest settlement date is 65438+ February 20th every year.

Except for small-scale farmers' loans, short-term loans (with a term of less than one year, including one year) bear interest according to the legal loan interest rate of the corresponding grade on the signing date of the loan contract. During the loan contract period, in case of interest rate adjustment, interest will not be calculated by installments.

Short-term loans are settled quarterly, and the 20th day of the last month of each quarter is the settlement date; If the interest is settled on a monthly basis, the 20th of each month is the interest settlement date. The specific interest settlement method shall be determined by the borrower and the lender through consultation. Interest that cannot be paid on schedule during the loan period shall be compounded quarterly or monthly according to the loan contract interest rate, and after loans overdue, at the default interest rate. When the last loan is paid off, the profit will be paid off with the principal.

The interest rate of medium and long-term loans (with a term of more than one year) should be fixed at one year. The loan (including all the funds that should be allocated by installments within one year from the effective date of the loan contract) bears interest according to the legal loan interest rate of the corresponding grade on the effective date of the loan contract, and the interest rate for the next year is determined according to the legal loan interest rate of the corresponding grade at that time after each full year (subject to the payment date of the first installment loan). Medium and long-term loans are settled quarterly, and the 20th of the last month of each quarter is the settlement date. Interest that cannot be paid on schedule during the loan period shall be compounded quarterly according to the contract interest rate. After loans overdue, compound interest shall be calculated at the penalty interest rate.

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calculate

The interest rate conversion formula for RMB business is (note: common for deposits and loans):

1, daily interest rate (0/000)= annual interest rate (%)÷360= monthly interest rate (‰)÷30.

2. Monthly interest rate (‰) = annual interest rate (%)÷ 12.

Banks can use product interest method and transaction interest method to calculate interest.

1. Accumulate the account balance daily according to the actual number of days, and multiply the accumulated product by the daily interest rate to calculate the interest. The interest-bearing formula is: interest = accumulated interest-bearing products × daily interest rate, where accumulated interest-bearing products = total daily balance.

2. Transaction-by-transaction interest calculation method calculates interest one by one according to the preset interest calculation formula: interest = principal × interest rate × loan term, with three details:

If the interest-bearing period is a whole year (month), the interest-bearing formula is:

① Interest = principal × year (month )× year (month) interest rate

If the interest-bearing period is a whole year (month) and days, the interest-bearing formula is:

② Interest = principal × annual (monthly) × annual (monthly) interest rate+principal × odd days × daily interest rate.

At the same time, banks can choose to convert all interest-bearing periods into actual days to calculate interest, that is, 365 days per year (366 days in leap years), and each month is the actual number of days in the Gregorian calendar of the current month. The interest-bearing formula is as follows:

③ Interest = principal × actual days × daily interest rate

These three formulas are essentially the same, but because the interest rate conversion is only 360 days a year, when calculating the actual daily interest rate, it will be calculated as 365 days a year, and the result will be slightly biased. Which formula is used specifically, the central bank gives financial institutions the right to choose independently. Therefore, the parties and financial institutions can agree on this in the contract.