"beheading interest" means that the lender deducts some money from the principal when providing loans to the borrower. "beheading interest" is illegal, and the loan interest cannot be deducted from the loan principal in advance. If the interest is deducted from the principal in advance, the borrower shall repay the loan according to the actual loan amount and calculate the interest. Legal basis: Article 670 of the Civil Code stipulates that the interest of a loan shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan will be repaid according to the actual loan amount and the interest will be calculated. Article 671 Where the lender fails to provide the loan on the agreed date and amount, thus causing losses to the borrower, it shall compensate for the losses. If the borrower fails to collect the loan according to the agreed date and amount, it shall pay interest according to the agreed date and amount. Article 672 The lender may inspect and supervise the use of the loan as agreed. The borrower shall regularly provide relevant financial and accounting statements or other materials to the lender as agreed. Article 673 Where the borrower fails to use the loan according to the agreed purpose, the lender may stop issuing the loan, recover the loan in advance or terminate the contract.

legal ground

Article 670 of the Civil Code of People's Republic of China (PRC) * * * Loan interest shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan will be repaid according to the actual loan amount and the interest will be calculated.

Article 671 of the Civil Code of People's Republic of China (PRC): Consequences of Lender's failure to provide loans and Borrower's failure to collect loans as agreed. If the lender fails to provide the loan according to the agreed date and amount, thus causing losses to the borrower, it shall compensate for the losses. If the borrower fails to collect the loan according to the agreed date and amount, it shall pay interest according to the agreed date and amount.

Article 672 of the Civil Code of People's Republic of China (PRC) * * * Lender's Right of Supervision and Inspection The lender may inspect and supervise the use of the loan as agreed. The borrower shall regularly provide relevant financial and accounting statements or other materials to the lender as agreed.

Article 673 of the Civil Code of People's Republic of China (PRC): If the borrower fails to use the loan according to the agreed purpose, the lender may stop issuing the loan, recover the loan in advance or terminate the contract.