Loan sharking refers to loans that charge particularly high interest rates. It originated at the end of primitive society. In slave society and feudal society, it was the basic form of credit [1]. In other words, before the emergence of capitalist society and the establishment of the modern banking system, private lending carried very high interest rates.

According to the "Notice of the People's Bank of China on Banning Underground Banks and Combating Usury Activities", the interest rate for private personal loans is determined by negotiation between the borrower and the borrower, but the interest rate negotiated by both parties shall not exceed the financial institution announced by the People's Bank of China. 4 times the loan interest rate (excluding floating) for the same period and grade. Anything exceeding the above standards should be defined as high-interest lending.

Article 26 of the Supreme People's Court's "Regulations on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases" stipulates:

The interest rate agreed upon by both parties does not exceed the annual interest rate of 24%. If the lender requests the borrower to pay interest according to the agreed interest rate, the people's court shall support it.

If the interest rate agreed between the borrower and the lender exceeds the annual interest rate by 36%, the excess interest agreement is invalid. If the borrower requests the lender to return the interest that has been paid in excess of 36% of the annual interest rate, the People's Court shall support the request.

It can be seen from the above that since the implementation of the "Regulations on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases" of the Supreme People's Court on September 1, 2015, the standard for usury will no longer be based on whether the annual interest rate exceeds 24%. As the standard, and whether it exceeds 36% as the standard, that is to say, any annual interest rate not exceeding 36% is not considered usury.

Chinese name

Usury

Foreign name

Usury; feneration

Alias

Big ear hole, underground bank, donkey rolling

Characteristics

High interest rates, heavy exploitation, unproductive

Word definition

According to " The Notice of the People's Bank of China on Banning Underground Banks and Combating Usury Activities" stipulates:

The interest rate for private personal loans shall be determined through negotiation between the borrower and the borrower, but the interest rate negotiated by both parties shall not exceed the financial institution's rate announced by the People's Bank of China for the same period and 4 times the loan interest rate (excluding floating rates) of the same grade. Anything exceeding the above standards should be defined as high-interest lending [2].

In loan sharking activities, if the usurious loan and then on-lending at high interest reaches a certain amount, it constitutes the crime of illegally absorbing public deposits; for the purpose of on-lending, defrauding credit funds from financial institutions and lending to others at high interest, and the illegal amount is A larger amount constitutes the crime of loan sharking; for the purpose of illegal possession, the use of fraud methods to illegally raise funds, and a relatively large amount constitutes a crime of fund-raising fraud; loan sharking can easily lead to illegal detention, kidnapping, injury, fraud and other criminal crimes; private intermediaries The high-interest lending of self-owned funds of institutions and individuals with legitimate income is considered private lending. If a lending dispute occurs, it falls within the scope of civil adjustment [2].

Usury interest = borrowing amount * interest rate * term, which is a common calculation method for loan interest. For example, for a loan shark with a monthly interest rate of 4 cents, the loan amount is 100,000 yuan, and the interest for one month is 100,000*4%*1=4,000 yuan[2