legal ground
Article 670 of the Civil Code of People's Republic of China (PRC)
The 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.
Article six hundred and eighty
It is forbidden to lend at high interest rate, and the lending rate shall not violate the relevant provisions of the state.
Notice of the People's Bank of China on banning underground banks and cracking down on usury.
Second, strictly regulate private lending behavior. Private individual lending activities must strictly abide by the relevant provisions of national laws and administrative overlap, and follow the principles of voluntary mutual assistance, honesty and credit. In private individual lending, the lender's funds must be its own monetary funds belonging to its legitimate income, and it is forbidden to absorb other people's funds and transfer them to others for lending. The interest rate of private personal loans shall be determined by both borrowers and borrowers through consultation, but the interest rate determined through consultation between the two parties shall not exceed 4 times of the loan interest rate of financial institutions of the same grade in the same period announced by the People's Bank of China (excluding floating). Those who exceed the above standards should be defined as high-interest loans.