More than 24% is not protected by law, which means that it is legal not to exceed this range. Therefore, when the borrower engages in private lending activities, if the expected annualized interest rate exceeds the legal range, there is still a chance to recover some losses. If private lending involves a large amount, it is a risky behavior for both borrowers and lenders, and it is best to complete it within the legal scope.

A loan contract is a contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest. Among them, the party that borrows money from the other party is called the borrower, and the party that borrows money is called the lender. According to different lenders, loan contracts can be divided into financial institution loan contracts and natural person loan contracts, both of which are typical property ownership transfer contracts.

legal ground

People's Republic of China (PRC) Civil Code

Article 670 Interest on a loan shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan shall be repaid according to the actual loan amount and the interest shall be calculated. Article 680 It is forbidden to lend at high interest, and the loan interest rate shall not violate the relevant provisions of the state.

If there is no agreement on the payment of interest in the loan contract, it shall be deemed that there is no interest.

If the loan contract does not specify the method of interest payment, and the parties cannot reach a supplementary agreement, the interest shall be determined according to the local or the parties' trading methods, trading habits, market interest rates and other factors; Loans between natural persons are regarded as having no interest.

General Rules of People's Republic of China (PRC) (China) Loan

Article 13 Determination of loan interest rate:

The lender shall determine the interest rate of each loan according to the upper and lower limits of the loan interest rate stipulated by the People's Bank of China, and specify it in the loan contract. Article 14 Calculation and collection of loan interest:

Lenders and borrowers shall collect or pay interest on schedule according to the loan contract and the relevant interest-bearing provisions of the People's Bank of China;

When the loan extension period and the original term reach the new interest rate term grade, the loan interest will be collected at the new term grade interest rate from the date of extension;

Penalty interest is charged for overdue loans according to regulations.