Chinese law stipulates that the interest rate for private loans shall be agreed upon by both parties. If the interest rate agreed between the borrower and the borrower exceeds the annual interest rate by 36%, the excess interest agreement shall be invalid.

The interest on private loans is agreed by both parties, but if it exceeds four times the bank loan interest rate for the same period, it is not protected by law. That is to say, if the borrower does not repay the money, the creditor will sue to the court, and the court will decide , interest will only be adjudicated at four times the bank loan interest rate for the same period, and no excess will be adjudicated. "Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases" Article 26 If the lender requests the borrower to pay interest according to the interest rate agreed in the contract, the People's Court shall support it, but the interest rate agreed upon by both parties exceeds the period when the contract is established. Except for loans with a one-year term that are four times the market quoted interest rate.

The "one-year loan market quoted interest rate" referred to in the preceding paragraph refers to the one-year loan market rate published monthly by the National Interbank Funding Center authorized by the People's Bank of China since August 20, 2019. Quoted interest rate.

Article 28 After the borrower and the lender have settled the principal and interest of the previous loan, they will include the interest into the principal of the later loan and re-issue the credit certificate. If the previous interest rate does not exceed the one-year loan market quotation rate of four times when the contract is established, times, the amount stated in the reissued credit certificate can be recognized as the later loan principal. The excess interest shall not be regarded as the later loan principal.

Based on the calculation of the preceding paragraph, the sum of principal and interest payable by the borrower after the expiration of the loan period exceeds the initial loan principal and the initial loan principal as the basis, based on the one-year loan market at the time the contract is established. If the sum of the interest for the entire loan period is calculated as four times the quoted interest rate, the People's Court will not support it.