The determinants of bank loan interest are
1, bank cost, any economic activity should be a cost-benefit comparison. There are two types of bank costs: borrowing costs-prepaid interest on borrowed funds, and extra costs-normal business expenses.
2, the average profit rate, interest is the breakdown of profits, interest must be less than the profit rate, the average profit rate is the highest limit of interest.
3. The supply and demand of borrowing money and funds, if the supply exceeds the demand, the loan interest rate will inevitably fall, and vice versa.
In addition, the loan interest rate must also consider price changes, securities returns, political factors and so on.
However, some scholars believe that the upper limit of interest rate should be the marginal rate of return of funds. The factor that restricts the interest rate is regarded as the comparison between the profit growth rate of enterprises after borrowing bank loans and the loan interest rate.
As long as the former is not lower than the latter, it is possible for enterprises to borrow money from banks.
Bank loan interest rate refers to the ratio of interest amount to principal amount during the loan period. The interest rate in China is managed by the People's Bank of China. The bank loan interest rate refers to the benchmark interest rate set by the People's Bank of China, and the actual contract interest rate can fluctuate within a certain range on the basis of the benchmark interest rate.
The loan interest rate refers to the ratio of interest amount to principal amount during the loan period. The interest rate of loan contracts with banks and other financial institutions as lenders can only be determined through consultation within the upper and lower limits of interest rates stipulated by the Bank of China.
If the loan interest rate is high, the repayment amount of the borrower will increase after the loan term, otherwise it will decrease.
The loan interest rate is the main basis for the parties to the loan contract to calculate the loan interest, and the loan interest rate clause is the main clause of the loan contract.
The interest rate of loan contracts with banks and other financial institutions as lenders can only be determined through consultation within the upper and lower interest rate limits stipulated by the People's Bank of China.
If the loan interest rate agreed by the parties is higher than the interest rate ceiling set by the People's Bank of China, the excess will be invalid; If the interest rate agreed by the parties is lower than the lower limit stipulated by the People's Bank of China, the lowest interest rate stipulated by the People's Bank of China shall prevail.
In addition, if the lender charges any other fees except interest in violation of the regulations of the People's Bank of China, it will be punished by the People's Bank of China.
The loan interest rate is generally higher than the deposit interest rate, and the difference between them is the main source of bank profits.