According to the law, the highest interest rate of private lending is 24% per annum, which is 2% per month.

The monthly interest rate 10% far exceeds the statutory monthly interest rate of 2%, which is of course usury.

Risk reward

The capital price of usury refers to the monthly interest rate 1 yuan, and six points are equivalent to the annual interest rate of 72%, while 1 gross is close to 120%, which is 5.3 1% higher than the annual bank lending rate (the lending rate is 2008-12-).

Monthly interest rate 10 is converted into annual interest rate 120%, while the current annual interest rate of bank loans is 5.31%(loan interest rate in 2008-12-23).

The monthly interest of ten cents is (100%) 0.10×12 =120%.

When the credit growth rate of commercial banks slows down, the market demand for private lending will inevitably rise. As private lending enters the era of "profiteering", its negative effects are getting bigger and bigger. The voice of strengthening the supervision of private lending is getting higher and higher.

It is worth noting that the ensuing payment crisis and the frequent flight of business owners have also made private borrowers feel insecure, as if they were avoiding an unexploded "time bomb".

It is understood that in this hierarchical model, if the return of the first tier is 25% of the principal, then the second tier is about 18%, the third tier is about 10%, the fourth tier is about 8%, and the lowest is generally 3%. Because there is a multi-level pattern, Wanmu said that the entire private lending network "no one knows how big it is."

In theory, "Yin-Yang IOUs" are enough to support all risks. If the borrower fails to fulfill the oral agreement, then the creditor can use this "foreign debt" to sue and claim his rights and interests, and there is no time limit.

Withholding interest in advance is also one of the manifestations of private lending behavior.

Private lending can be roughly divided into three forms: the first is short-term lending. For example, if an enterprise finds a good project, it needs a lot of money in the short term. When the project ends, the loan will also end. This kind of borrowing time is short and the interest is high; The second is long-term borrowing. The borrower has a fixed point or a fixed person. A loan is like a deposit in a bank. Can be accessed at any time. This way of borrowing is mainly adopted by enterprises that have made a certain scale and accumulated good credit, with low interest but little risk. The third kind is called "Mouse Club". For example, A lends B at a monthly interest rate of 2 cents, B lends C at a monthly interest rate of 3 cents, and C lends D at a monthly interest rate of 4 cents. Few people know who the ending is.