Is it safe to borrow money in circles? Is there any legal risk?

Peer-to-peer lending platform only uses Internet technology to make traditional private lending operate more efficiently and conveniently. First of all, Article 90 of the General Principles of the Civil Law stipulates that the legal lending relationship is protected by law, and it does not exclude private lending, but only requires that the lending relationship be legal. Article 196 of the Contract Law clearly defines the loan contract. A loan contract is a contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest, and does not exclude private lending. Article 1 of the Opinions on People's Courts Handling Lending Cases (hereinafter referred to as Lending Opinions) issued by the Supreme People's Court further regulates private lending, and clearly stipulates that lending disputes between citizens, lending disputes between citizens and legal persons, and lending disputes between citizens and other organizations shall be accepted as lending cases. This shows that private lending is protected by law.

Secondly, China's laws and regulations have other restrictive norms on private lending. Article 6 of the Lending Opinions stipulates that the interest rate of private lending may be appropriately higher than the bank interest rate, but the maximum interest rate shall not exceed 4 times that of similar loans (including interest rates) of banks. Beyond this limit, the excess interest will not be protected. The above provisions are mainly to protect the legitimate rights and interests of both borrowers and lenders, prevent usury, and clearly define the scope of private lending interest. As long as the loan relationship does not exceed the "four times interest rate", it belongs to the scope of legal protection.

To sum up, as long as the interest rate does not exceed 4 times of the bank's loan interest rate for the same period, private lending behavior is in line with the law and protected by law. In the loan circle, we will match the transactions between members through the Internet platform according to the interest rate range stipulated by national laws. Private lending is an investment channel for private capital. As an effective supplement to bank finance, it has gradually become an important form of private finance.