Usury refers to private lending that requires extremely high interest. The interest rate is usually determined by the borrower and the borrower through consultation, but the interest rate determined through consultation between the two parties shall not exceed 4 times the loan interest rate (excluding floating) of financial institutions of the same grade in the same period announced by the People's Bank of China. Those who exceed the above standards should be defined as high-interest loans.
There are three different views on usury in China's civil law circles.
The first view is that as long as the loan interest rate exceeds or in disguised form exceeds the interest rate stipulated by the state, it constitutes usury. Some scholars believe that the loan interest rate can be appropriately higher than the national bank loan interest rate, but it cannot exceed the maximum limit prescribed by law, otherwise it will constitute usury.
The second view is that there should be a legal limit for usury, but this limit should not be simply based on the bank's loan interest rate, but should be based on the actual situation in various places, specifically to develop private lending guidance interest rates. Those who exceed the upper limit of the guiding interest rate constitute usury. Those who hold this view also believe that if the agreed interest exceeds the statutory guidance interest rate, the excess is invalid and the creditor has no right to request payment of this part.
The third view is that usury is a kind of loan that exceeds the normal interest rate. As for how much interest exceeds to constitute usury, because there is no uniform provision and explanation in legislation and judicature, in practice, we can only make a concrete analysis of the specific loan-loan relationship according to the spirit of the general principles of civil law and related laws and the principle of protecting the legitimate loan-loan relationship, which is conducive to production and stabilizing the economic order, and then determine whether it constitutes usury.
This view also holds that when identifying usury, attention should be paid to distinguishing between life lending and production and operation lending, and the interest rate of the latter can generally be higher than that of the former. Because live loans are only used for consumption and will not add value; The purpose of production and operation loans is to obtain profits that exceed the principal, so its interest rate should be higher than that of living loans.