The loan interest rate refers to the ratio of the interest amount to the principal amount during the loan period, which is the interest rate charged by banks and other financial institutions to borrowers when granting loans.

China's interest rate is managed by the People's Bank of China, and the determined interest rate is implemented after being approved by the State Council.

The loan interest rate directly determines the profit distribution ratio between the borrowing enterprise and the bank, thus affecting the economic interests of both borrowers and lenders.

Loan interest rate classification

1. According to the difference between the two lenders, the loan interest rate can be divided into three categories: the loan interest rate of the central bank to commercial banks; The loan interest rate of commercial banks to customers; Interbank lending rate

2. According to whether the interest rate level changes during the monetary fund lending relationship, the loan interest rate can be divided into fixed interest rate and floating interest rate.

Correlation calculation of loan interest rate

(1) interest rate conversion formula for RMB business

1, daily interest rate (0/000)= annual interest rate (%)÷360= monthly interest rate (‰)÷30.

2. Monthly interest rate (‰) = annual interest rate (%)÷ 12.

(b) the method by which banks calculate interest.

1, product interest method

Accumulate the account balance daily according to the actual number of days, and multiply the accumulated amount by the daily interest rate to calculate the interest. The interest-bearing formula is: interest = accumulated interest-bearing products × daily interest rate, where accumulated interest-bearing products = total daily balance.

2. Transaction interest method

According to the predetermined interest calculation formula, interest = principal × interest rate× loan term, and interest is calculated one by one. There are three details:

(1) If the interest-bearing period is a whole year (month), the interest-bearing formula is: interest = principal × years (months) × years (months) interest rate.

(2) If the interest period has a whole year (month) and odd days, the interest formula is: interest = principal × number of years (months) × annual (month) interest rate+principal × odd days × daily interest rate.

(3) At the same time, banks can choose to convert the interest period into actual days to calculate interest, that is, 365 days per year (366 days in leap years), and each month is the actual number of days in the Gregorian calendar of the current month. The interest calculation formula is: interest = principal × actual days × daily interest rate.

These three formulas are essentially the same, but because the interest rate conversion is only 360 days a year and the actual daily interest rate calculation is 365 days a year, the results will be slightly biased. Which formula is used specifically, the central bank gives financial institutions the right to choose independently. Therefore, the parties and financial institutions can agree on this in the contract.