When it is mentioned that the loan interest rate is 5%, it actually means that the monthly interest rate is 0.5%. Convert this number to an annual interest rate, which is 6. To give a specific example, if you plan to borrow 100,000 yuan from a financial institution, the monthly interest cost you need to bear is 100,000 yuan times 0.5, which is 500 yuan. Converted into the total interest for one year, it is 500 yuan multiplied by 12 months, totaling 6,000 yuan. Therefore, the loan interest rate of 5% means the monthly interest payment and the total interest payment in a year. To put it simply, for every RMB 100,000 borrowed, the annual interest expense is RMB 6,000. This is the intuitive calculation for a loan with an interest rate of 5%.