Judicial Interpretation of Private Lending The following calculation method is based on Article 26 of Judicial Interpretation of Private Lending issued by the Supreme People's Court (implemented on September 20 15, 1 year). If the interest rate agreed by the borrower and the lender does not exceed the annual interest rate of 24%, the people's court shall support it. The interest rate agreed between the borrower and the borrower exceeds the annual interest rate of 36%, and the interest agreement in excess is invalid. The people's court shall support the borrower's request to the lender to return the part of the interest paid that exceeds 36% per annum. 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 calculation in 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 the 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. Twenty-ninth borrowers and lenders have agreed on overdue interest rates, which shall be implemented in accordance with the agreement, but the annual interest rate shall not exceed 24%. If the overdue interest rate is not agreed or clearly agreed, the people's court may handle it according to different circumstances: (1) If neither the interest rate during the loan period nor the overdue interest rate is agreed, the people's court shall support the lender in claiming that the borrower shall pay the interest during the capital occupation period at the annual interest rate of 6% from the date of overdue repayment; (2) If the interest rate during the loan period is agreed, but the overdue interest rate is not agreed, the people's court shall support the lender to claim that the borrower shall pay the interest during the capital occupation period according to the interest rate during the loan period from the date of overdue repayment. Article 30 The lender and the borrower have agreed on overdue interest rate, liquidated damages or other expenses. The lender may choose to claim overdue interest, liquidated damages or other expenses, or both, but the people's court will not support the part exceeding 24% of the annual interest rate. Article 31 If the borrower voluntarily pays interest or liquidated damages without agreeing on interest, or if the interest or liquidated damages exceed the agreed interest rate and do not harm the interests of the state, the collective and the third party, the people's court will not support it, unless the borrower requests to return the interest exceeding 36% per annum.
Legal objectivity:
Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases Article 1 The term "private lending" as mentioned in these Provisions refers to the financing behavior between natural persons, legal persons and unincorporated organizations. These provisions shall not apply to financial institutions and their branches engaged in loan business established with the approval of the financial supervision department, as well as disputes arising from loans and other related financial businesses. "Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases" Article 26 If the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except that the interest rate agreed by both parties exceeds four times the one-year loan market quotation at the time of the establishment of the contract. The "one-year loan market quotation" mentioned in the preceding paragraph refers to the one-year loan market quotation issued monthly by the National Interbank Funding Center authorized by the People's Bank of China from August 20th, 20th, 20th19th.