1. If the private lending institution itself is illegal, then the loan contract signed is invalid.
2. If the lender forces the borrower to sign a contract by fraudulent means, then the contract is invalid.
3. Private lending is to lend money to the borrower in the form of lending (the lender borrows money from other lending institutions first, and then lends the loan amount to the borrower). If the borrower knows this, the loan contract signed is invalid.
4. The borrower's loan purpose does not meet the state regulations. If the funds are used for illegal activities, the loan contract signed by the borrower and the lending institution is invalid.
5. The interest rate of private lending is more than 4 times higher than the benchmark interest rate in the same period. The loan interest rate belongs to usury, and the loan contract signed by both borrowers and borrowers is invalid.
Legal basis: Civil Code of People's Republic of China (PRC).
Article 144 A civil juristic act performed by a person without capacity for civil conduct is invalid.
Article 146 A civil juristic act by the actor and the counterpart with false intention is invalid. The validity of a concealed civil juristic act with false intention shall be handled in accordance with relevant laws and regulations.
Article 153 A civil juristic act that violates the mandatory provisions of laws and administrative regulations is invalid. However, unless mandatory provisions do not invalidate civil legal acts. A civil legal act that violates public order and good customs is invalid.
Article 154 A civil legal act in which the actor colludes with the counterpart in bad faith and damages the legitimate rights and interests of others is invalid.
Article 505 The validity of a contract concluded by the parties beyond the scope of business shall be determined in accordance with Section 3 of Chapter VI of Part I of this Law and the relevant provisions of this Chapter, and the contract shall not be deemed invalid because it exceeds the scope of business.