【How to calculate interest on private lending】
In the general common private loan cases, the arrears and loans can be divided into interest-free loans and interest-bearing loans according to whether they contain interest, of which interest-bearing loans are the most common.
Interest-bearing borrowing needs to be clear about the calculation of interest. At the same time, in the court of Nanyang District, the general interest calculation method for loans, arrears, purchases, etc. is the same, and the plaintiff is required to specify the amount of interest, calculation method, time limit and other details of the loan in the complaint before the case can be accepted.
The calculation formula is: interest = principal× interest rate× term of borrowing. Therefore, in the calculation of interest, three concepts need to be clarified, namely principal, interest rate, and loan term.
How the principal amount in the loan is determined:
In private lending cases, in principle, the principal is determined according to the amount on the IOU, and if there is no IOU, the transfer voucher or other evidence shall prevail.
In the special case, in the case of beheading interest, the principal is determined according to the actual funds received. For example, Zhang San borrowed 100,000 yuan from Li Si and issued an IOU.
But the actual situation is that Li Si only gave Zhang San 95,000 yuan, and at this time, the principal was 95,000 yuan. Professional loan lawyers or lending lawyers will present evidence and anyway according to the actual arrival of the account to restore the true situation of the case and safeguard the legitimate rights and interests of the parties.
How interest is determined in borrowings:
In judicial practice, the calculation of interest exists in several different stages according to the fixation of laws and regulations in different periods.
Lending occurs before August 20, 2020, and the annualized interest rate is up to 24%, which is often referred to as "two cents".
Borrowing occurs after August 20, 2020, and the interest on the loan cannot exceed four times the quoted interest rate of the 1-year loan market at the time the loan contract is formed.
Because the quoted interest rate in the 1-year loan market is variable, the calculation of interest is becoming more and more complicated.
That is, from August 20, 2020 to December 19, 2021, according to the authorization of the Chinese Min bank, the National Interbank Lending Center announced that the quoted interest rate of the 1-year loan market is 3.85% per annum, and the maximum shall not exceed 4 times, that is, the maximum annualized interest rate of private lending shall not exceed 15.4%.
During the period from December 20, 2021 to January 19, 2022, the quoted interest rate in the 1-year loan market is 3.8% per annum, that is, the maximum annualized interest rate of private lending shall not exceed 15.2%. After January 20, 2022, the quoted interest rate in the 1-year loan market is 3.7% per annum, that is, the maximum annualized interest rate of private lending shall not exceed 14.8%.
How the term of the loan is determined:
In private lending cases, the term of the loan is generally calculated on a daily basis. In principle, the starting time of the loan or arrears shall be based on the date on which the IOU was issued or the date on which the money arrived, and if the time of the IOU is inconsistent with the actual arrival time, the date of arrival shall prevail.
The treatment of general types of monetary debts such as borrowing and arrears has a certain universality, and its calculation method is general in principle.
Generally, the interest rate ranges from 1 cent to 2 cents, but in the current national policy environment of generally reducing interest rates, 2 cents interest (24% per annum) may not be supported by the court.
IOUs or IOUs with a relatively long time need to be prosecuted as soon as possible. At the same time, when suing the court for private lending, it is best to submit a detailed interest calculation form in the evidence, which contains details such as principal, interest, and loan term, so as to speed up the progress of the case and facilitate the court's trial.
