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Note: the folk loan disputes more and more, are also on the rise, the interest shall become the main causes of the disputes, private lending interest must clear requirements, there is no clear agreement for interest free loans, there is interest on the amount of not more than four times to the bank loan interest rate to obtain the legal protection.

In April 8, 2008, Wu find Wang, said he would buy a number of fish feed, need the money, surnamed Wang to loan 40000 yuan, the interest can be a little higher, the two sides signed the loan contract, agreed in the contract, the loan period is half a year, the annual interest rate is 25%. In October 9, 2008, the loan maturity, interest on the loan interest rate Wu only has a principal and banks in the same period of 2 times. Wang demanded the return of all interest parties agreed, Wu believes that when the two sides agreed that interest rates are too high, refused to repay the remaining interest. Wang believes that when the two sides agreed interest is voluntary, Wu should return all agreed interest. Because the two sides under dispute, Wang Mousui went to court, asking the court to adjudicate according to law.

[The judgment of the court]

The court's investigation: Wu and Wang on a voluntary basis of contract, the contract effective. But of the contract interest rate more than four times the bank lending rates over the same period, the exceeding part is not protected. The decision by the Wu to pay loan interest rate 2 times over the same period the bank interest to wang.

[Legal analysis]

Among the citizens of the borrowing is allowed by the laws of China a private short-term financing way. Because it is the financial management order of the state outside of the capital, the state of its control is not strict, prone to usury damage the interests of the borrower. Find and endanger the national financial order phenomenon. Therefore, although the borrowing by private freedom of contract interest rate, but the freedom to be subject to certain restrictions. The Supreme People's court "a number of opinions" about people's court lending case the provisions of article sixth "borrowing rate can be higher than bank interest rates, all over the court can be mastered according to the actual situation in the region, but the maximum shall not exceed four times the bank lending rates over the same period (including this number)".

Contract law:

The loan contract is the borrower to the lender, due to repay the loan and interest payment contract.

　   197th loan contracts shall be in written form, but the loan is between natural persons who have agreed otherwise.

　A contract for loan of money includes loan type, currency, purpose, amount, interest rate, term and method of repayment terms.

　   Article 198th a contract for loan of money, the lender may require the borrower to provide a guaranty. In accordance with the provisions of the guarantee "Guaranty Law of the people's Republic".

　   Article 199th a loan contract, the borrower shall provide true information as required by the lender and borrower related business activities and financial conditions.

　   200th interest on a loan may not be deducted from the principal in advance. The interest deducted from the principal in advance, in accordance with the actual amount borrowed and calculation of interest.

　   Article 201st the lender fails to provide the loan in accordance with the agreed date, amount, thereby causing loss to the borrower, it shall pay compensation for the losses.

 The borrower fails to accept the loan in accordance with the agreed date and amount, it shall pay the interest according to the agreed date, the amount.

　   Article 202nd the lender can check, supervise the use of the loan in accordance with the contract. The borrower shall periodically provide the lender with relevant financial statements and other materials in accordance with the contract.

　   203rd the borrower fails to use the prescribed purpose, the lender may stop providing the loan, call the loan, or terminate the contract.

　   Article 204th financial institutions loan business loan interest rates, should be in accordance with the provisions of the people's Bank of China upper limit and lower limit of loan interest rates to determine.

　   205th the borrower shall pay the interest according to the agreed time limit. On the payment of interest period was not prescribed or clearly prescribed, in accordance with this Law   Sixty-first the provisions of the still uncertain, the loan period is less than one year, shall be paid in return the loan; loan period in more than a year, shall be paid at the end of each year, the remaining period of less than one year, shall repay the loan to be paid in.

　   206th the borrower shall repay the loan at the agreed time. The loan period was not prescribed or clearly prescribed, in accordance with this Law   Sixty-first the provisions of still cannot be determined, the borrower can repay at any time; the lender may urge the borrower to return within a reasonable period of time.

　   207th the borrower fails to repay the loan in accordance with the agreed time limit, shall be in accordance with the contract or the relevant provisions of the state pay overdue interest.

　   Article 208th the early repayment of loans, except as otherwise agreed by the parties, the interest shall be calculated based on the actual period of loan.

　   209th the borrower may apply to the lender for extension of the loan term before. With the consent of the lender, the loan term may be extended.

　   Between the 210th nature of the loan contract, the lender makes the loan effect.

　   Between 211st natural person the loan was not prescribed or clearly prescribed, as non payment of interest. The payment of interest agreed a loan contract between natural persons, the loan interest rate shall not violate the provisions of relevant state limit on loan interest rate.