Usually, the interest of 4 cents refers to the monthly interest rate of 4%. Both parties can freely agree on the interest of private lending, as long as the agreed interest does not exceed 4 times the bank loan interest rate for the same period, it will be protected by law. At present, the annual interest rate of bank loans in the same period in China is 5.6%, multiplied by 4 equals 22.4%, while the annual interest rate of 3% is 48%, which is obviously more than four times that of bank loans in the same period. But no matter how much interest is agreed, as long as the borrower is willing to repay the high interest, the law will not actively interfere. Just because the borrower fails to repay the loan, after the lender appeals to the court, the court will only judge the interest within four times of the bank loan interest rate in the same period.

Opinions on the People's Court's Trial of Private Lending Cases

Six, the interest rate of private lending can be appropriately higher than the bank interest rate, the local people's courts can specifically grasp according to the actual situation in the region, but the maximum shall not exceed four times that of similar bank loans (including interest rates). Beyond this limit, the excess interest will not be protected.

Seven, the lender shall not include interest in the principal to seek high profits. If it is found during the trial that the creditor included the interest in the principal to calculate compound interest, if the interest rate exceeds the limit stipulated in Article 6, the excess interest will not be protected.

Ten, one party by means of fraud, coercion or take advantage of others' danger, so that the other party violates the true meaning of the loan relationship, should be considered invalid. If the loan relationship is invalid due to the creditor's behavior, only the principal will be returned; If the debtor's behavior causes an invalid loan relationship, in addition to returning the principal, interest should also be paid with reference to the bank's similar loan interest rate.

"People's Republic of China (PRC) Contract Law" Article 200 * * * loan interest shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan will be repaid according to the actual loan amount and the interest will be calculated.