What is the People’s Bank of China’s benchmark loan interest rate in 2022

According to the central bank’s announcement:

The People’s Bank of China’s loan benchmark interest rate:

< p> (1) Short-term loan: the adjusted interest rate within one year (including one year) is 4.35.

(2) Medium and long-term loans: the adjusted interest rate for one to five years (including five years) is 4.75; the adjusted interest rate for more than five years is 4.90.

(3) Personal housing provident fund loan: the adjusted interest rate for less than five years (including five years) is 2.75; the adjusted interest rate for more than five years is 3.25.

Loan interest rate is the interest rate charged by banks and other financial institutions to borrowers when they issue loans. It is mainly divided into three categories: the central bank's loan interest rate to commercial banks; the commercial bank's loan interest rate to customers; and the interbank lending rate.

The factors that determine bank loan interest are:

1. Bank costs. Any economic activity requires cost-benefit comparison. There are two types of bank costs: borrowing costs - prepaid interest on borrowed funds; additional costs - expenses incurred in normal business.

2. Average profit rate. Interest is a subdivision of profit. Interest must be less than the profit rate. The average profit rate is the highest limit of interest.

3. The supply and demand situation of lending currency funds. If supply exceeds demand, loan interest rates will inevitably fall, and vice versa. In addition, loan interest rates must also take into account price changes, securities income factors, political factors, etc.

However, some scholars believe that the highest limit of interest rate should be the marginal rate of return of funds. The factor that constrains the interest rate is regarded as the ratio of the increase in profit of the enterprise after borrowing a bank loan to the amount of borrowing and the loan interest rate. As long as the former is not less than the latter, the company may borrow from the bank.

Bank loan interest rate refers to the ratio of interest amount to principal amount during the loan period. my country's interest rates are uniformly managed by the central bank. The bank loan interest rate refers to the benchmark interest rate set by the central bank, and the actual contract interest rate can fluctuate within a certain range based on the benchmark interest rate.

The loan interest rate refers to the ratio of the interest amount to the principal amount during the loan period. When determining the interest rate of a loan contract with a bank or other financial institution as the lender, the parties can only negotiate within the upper and lower limits of the interest rate stipulated by the central bank. If the loan interest rate is high, the borrower's repayment amount will increase after the loan period, otherwise, it will decrease.

The loan interest rate is the main basis for both parties to the loan contract to calculate the loan interest, and the loan interest rate clause is the main clause of the loan contract.

To determine the interest rate of a loan contract with a bank or other financial institution as the lender, the parties can only negotiate within the upper and lower limits of the interest rate specified by the central bank. If the loan interest rate agreed upon by the parties is higher than the upper limit of interest rates stipulated by the People's Bank of China, the excess shall be invalid; if the interest rate agreed upon by the parties is lower than the lower limit of interest rates stipulated by the Central Bank, the lowest interest rate stipulated by the Central Bank shall prevail.

In addition, if the lender violates the regulations of the central bank and charges any other fees in addition to interest, the central bank shall impose penalties.

Loan interest rates are generally higher than deposit interest rates, and the difference between the two is the main source of bank profits.