In daily life, the interest rates generally mentioned by everyone are nominal annual interest rates. For example, if the time deposit interest rate is 5%, this 5% represents the nominal annual interest rate.
The interest rate often referred to as a few cents in private lending, unless otherwise stated, usually refers to the monthly interest rate. 1 cent interest is a monthly interest rate of 1%, which is converted into an annual interest rate of 12%.
Borrowers should pay attention when choosing various loan products, because each lending institution has different calculation methods. Some calculate it in days, and some calculate it in months. Some interest rates are calculated on an annual basis, so lenders are required to learn how to convert interest rates to avoid borrowing at high interest rates.
As for the interest rate of borrowing, some small loan institutions often do not directly disclose the annual interest rate, but will say the daily interest rate. Borrowers should be more vigilant when they see the daily interest rate. The court will not disclose the annual interest rate directly. The interest rate is divided into two lines and three zones, with 24% and 36% as the two lines. As long as the annual interest rate exceeds 36%, the excess interest is invalid and constitutes usury.
I would like to remind everyone that when you generally need funds, it is best to apply for a loan at a bank. Bank loan interest rates are generally around 6%, which is very reasonable, and the interest rates for small loans may be bank loans. Two to three times the interest rate, so be careful when borrowing.