Private lending refers to the act of financing between natural persons, legal persons and other organizations, rather than between financial institutions engaged in loan business and their branches established with the approval of financial supervision departments. Private lending cannot deduct interest first, and lending cannot deduct interest in advance. The loan interest shall not be deducted from the principal in advance. If the interest is deducted from the principal in advance, the loan shall be repaid according to the actual amount and the interest shall be calculated. Article 670 of the Civil Code stipulates that the 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.

What is private lending?

Private lending refers to lending between citizens, between citizens and legal persons, and between citizens and other organizations. As long as the opinions of both parties are true, it can be considered effective, and the mortgage generated by the loan is also effective accordingly, but the interest rate shall not exceed the relevant interest rate stipulated by the People's Bank of China.

Private lending is divided into private individual lending activities and lending between citizens and financial enterprises. Private individual lending activities must strictly abide by the relevant provisions of national laws and administrative regulations, and follow the principles of voluntary mutual assistance, honesty and credit.

Private lending is a direct financing channel, while bank lending is an indirect financing channel. Private lending is an investment channel of private capital and a form of private finance. Since 2003, the state has gradually liberalized the restrictions on private microfinance and formulated a series of supporting policies, which has made the industry in folk credit develop rapidly.

Legal basis:

Article 680 of the Civil Code of People's Republic of China (PRC) prohibits high-interest lending, and the lending rate shall not violate the relevant provisions of the state.

If there is no agreement on the payment of interest in the loan contract, it shall be deemed that there is no interest.

If the loan contract does not specify the payment method of interest, and the parties cannot reach a supplementary agreement, the interest shall be determined according to the local or the parties' trading methods, trading habits, market interest rates and other factors; Loans between natural persons are regarded as interest-free.

What is private lending? Is private lending really illegal?

1. What is private lending and what are its characteristics? (1) What is private lending? Private lending refers to lending between citizens, between citizens and legal persons, and between citizens and other organizations. As long as the intentions of both parties are true, it can be considered as valid, and the mortgage generated by the loan is also valid accordingly, but the interest rate shall not exceed the relevant interest rate stipulated by the People's Bank of China. (2) What are the characteristics of private lending? 1. Private lending is a civil legal act. Lenders and borrowers form a specific creditor-debtor relationship by signing a written loan agreement or reaching an oral agreement, thus generating corresponding rights and obligations. The relationship between creditor's rights and debts is an important part of China's civil legal relationship, which is protected by law once it is formed. 2. Private lending is a contractual behavior. Private lending is a contractual behavior between lenders and borrowers. Whether the lender and the borrower form a loan relationship, as well as the amount, object and term of the loan, depends on the written or oral agreement between the lender and the borrower. As long as the contents of the agreement are legal, they are allowed and protected by law. 3. The premise of the establishment of private lending relationship is the actual payment of the loan. Whether the borrower and the borrower form a loan relationship requires the lender to deliver money or other securities to the borrower in addition to the contents and meanings of the loan target, amount and repayment period, before the loan relationship can be formally established. 4. The ownership of the subject matter of private lending must clearly belong to the lender. The subject matter of private lending must be the property owned or dominated by the lender, and the lending relationship formed by the property not owned by the lender or over which the lender has no control is invalid and not protected by law. 5. Private lending can be paid or unpaid. If there is no agreement or unclear agreement on the payment of interest in the loan contract, it shall be regarded as non-payment. If the loan contract between natural persons stipulates to pay interest, the loan interest rate shall not violate the relevant provisions of the state on limiting the loan interest rate. In other words, the lender can only ask the borrower to pay interest when repaying the principal if it is agreed in a written or oral agreement in advance. If there is no interest agreement or the interest agreement between natural persons is unclear, it does not mean that the borrower does not need to pay interest at any time. When the loan contract expires, the borrower is obliged to repay the loan and interest from the date when the lender claims the right. Second, is private lending legal? Generally speaking, private lending is legal, but it must be within the scope permitted by law, otherwise it will not be protected. Private lending is divided into private individual lending activities and lending between citizens and financial enterprises. Private individual lending activities must strictly abide by the relevant provisions of national laws and administrative regulations, and follow the principles of voluntary mutual assistance, honesty and credit. Lenders' funds must be their own funds belonging to their legitimate income, and it is forbidden to absorb other people's funds and lend them by themselves. The interest rate of private individual lending shall be determined by both parties through consultation, but the interest rate determined through consultation shall not exceed the national regulations. Loans between citizens and enterprises can be regarded as valid as long as the meaning of both parties is true. In practice, a loan contract shall be deemed invalid under any of the following circumstances: (1) An enterprise illegally raises funds from employees in the name of borrowing money. (2) Enterprises illegally raise funds from the society in the name of borrowing. (3) Enterprises issue loans to the public in the name of loans. (4) Other lending behaviors in violation of laws and administrative regulations.

What is private lending? Is inter-enterprise loan financing a private loan?

Private lending is a kind of private financial activity with a long history and widespread worldwide, which mainly refers to the financing behavior between natural persons, between natural persons and legal persons or other organizations, and between legal persons or other organizations with money or other securities as the target. Financial institutions and their branches established with the approval of the financial supervision department to engage in loan business, loan issuance and other related financial businesses do not belong to the category of private lending, so inter-enterprise lending financing belongs to the category of private lending.

Tips: The above information is for reference only.

Response time: 2021-11-18. Please refer to the latest business changes announced by Ping An Bank in official website.

What's the difference between financial lending and private lending?

Private lending refers to the act of financing between natural persons, legal persons and other organizations, rather than between financial institutions engaged in loan business and their branches established with the approval of financial supervision departments. Loans from financial institutions refer to long-term loans borrowed by enterprises from banks, insurance companies, finance companies and other financial institutions.

Tips: The above contents are for reference only.

Reply time: 202 1-07- 13. Please refer to the latest business changes announced by Ping An Bank in official website.

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What is private lending?

Private lending refers to lending between citizens, between citizens and legal persons, and between citizens and other organizations. As long as the opinions of both parties are true, it can be considered effective, and the mortgage generated by the loan is also effective accordingly, but the interest rate shall not exceed the relevant interest rate stipulated by the People's Bank of China.

According to Article 211 of the Contract Law: "If the loan contract between natural persons stipulates to pay interest, the interest rate of private lending shall not violate the relevant provisions of the state on limiting the loan interest rate". At the same time, according to the relevant provisions of the Supreme People's Court's Opinions on People's Trial of Lending Cases: "The interest rate of private lending may be appropriately higher than that of banks, but the maximum shall not exceed four times that of similar loans of banks".

Private lending is a direct financing channel, while bank lending is an indirect financing channel. Private lending is an investment channel of private capital and a form of private finance.

Extended data:

Characteristics of judicial interpretation of private lending;

Private lending is not only an economic phenomenon, but also a legal phenomenon. Judging from the judicial interpretation, private lending has the following main legal characteristics:

(1) Private lending is a civil legal act. Lenders and borrowers form a specific creditor-debtor relationship by signing a written loan agreement or reaching an oral agreement, thus generating corresponding rights and obligations. The relationship between creditor's rights and debts is an important part of China's civil legal relationship, which is protected by law once it is formed.

(2) Private lending is a contractual act between the lender and the borrower. Whether the borrower and the borrower form a loan relationship, as well as the loan amount, loan object and loan term, depends on the written or oral agreement between the borrower and the borrower. As long as the contents of the agreement are legal, they are allowed and protected by law.

(3) The premise of the establishment of private lending relationship is the actual payment of the loan. Whether the borrower and the borrower form a loan relationship requires the lender to deliver money or other securities to the borrower in addition to the contents and meanings of the loan target, amount and repayment period, before the loan relationship can be formally established.

(4) The subject matter of private lending must be the property owned or controlled by the lender. The loan relationship formed by the property that does not belong to the lender or the lender has no control right is invalid and not protected by law.

(5) Private lending can be paid or unpaid, and whether it is paid or not shall be agreed by both parties. The lender can only ask the borrower to pay interest when repaying the principal if it is agreed in writing or orally in advance.

At present, the interest on private lending cannot exceed 15.4%, which is the online judicial protection. If the interest of private lending exceeds 15.4%, it should be regarded as illegal lending.

If the lender requires the borrower to pay interest at the interest rate agreed in the contract, the people shall support it, except that the interest rate agreed by both parties exceeds four times the listed interest rate in the one-year loan market when the contract is established.

Article 667 of the Civil Code is a loan contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest.

Article 668 A loan contract shall be in written form, unless otherwise agreed between natural persons.

The contents of a loan contract generally include terms such as loan type, currency, purpose, amount, interest rate, term and repayment method.

Article 669 When concluding a loan contract, the borrower shall, at the request of the lender, provide the true information about the business activities and financial status related to the loan.

Regarding what is private loan, the introduction of private loan companies ends here. I wonder if you have found the information you need?