A loan company that meets the company's establishment criteria is legal, and the interest rate stipulated in the contract signed by the loan business is not more than 24% per annum, which is legal. If the agreed interest rate exceeds the annual interest rate of 36%, the loan is illegal, and the excess interest is invalid. And may involve criminal offences. 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. In private individual lending, the lender's funds must be its own monetary funds belonging to its legitimate income, and it is forbidden to absorb other people's funds and transfer them to others for lending. The interest rate of private personal loans shall be determined by both borrowers and borrowers through consultation, but the interest rate determined through consultation between the two parties shall not exceed 4 times of the loan interest rate of financial institutions of the same grade in the same period announced by the People's Bank of China (excluding floating). Those who exceed the above standards should be defined as high-interest loans.
Legal basis:
Article 26 of the Supreme People's Court's Provisions on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases stipulates that if the interest rate agreed by both lenders and borrowers does not exceed 24% per annum, the people's court shall support it. The interest rate agreed between the borrower and the borrower exceeds the annual interest rate of 36%, and the interest agreement in excess is invalid. The people's court shall support the borrower's request to the lender to return the part of the interest paid that exceeds 36% per annum.
Notice of the People's Bank of China on Banning Underground Banks and Cracking Down on usury (Yinfa [2002] No.30)
Second, strictly regulate private lending behavior. 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. In private individual lending, the lender's funds must be its own monetary funds belonging to its legitimate income, and it is forbidden to absorb other people's funds and transfer them to others for lending. The interest rate of private personal loans shall be determined by both borrowers and borrowers through consultation, but the interest rate determined through consultation between the two parties shall not exceed 4 times of the loan interest rate of financial institutions of the same grade in the same period announced by the People's Bank of China (excluding floating). Those who exceed the above standards should be defined as high-interest loans.
Crime of borrowing at high interest in Article 175 of the Criminal Law of People's Republic of China (PRC)
Borrowing credit funds from financial institutions for the purpose of lending, and lending them to others at high interest rates, if the amount of illegal income is relatively large, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall also be fined not less than one time but not more than five times the illegal income; If the amount is huge, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, and shall also be fined not less than one time but not more than five times the illegal income. Where a unit commits the crime mentioned in the preceding paragraph, it shall be fined, and the persons who are directly in charge and other persons who are directly responsible shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention.
Provisions of the Supreme People's Procuratorate and the Ministry of Public Security on the Standards for Public Security Organs to Jurisdicte Criminal Cases for Filing and Prosecuting (II) Article 26 [High-interest Loan Cases (Article 175 of the Criminal Law)] In order to obtain credit funds from financial institutions, if it is suspected of one of the following circumstances, it shall be filed for prosecution:
(1) Lending with high interest rate, and the illegal income is more than 100,000 yuan;