2022年1月29日

The central bank: all loan products should show the loan annualized interest rate

March 31, according to the central bank website news, recently, the central bank issued a notice that in order to maintain the loan market competition order, protect the legitimate rights and interests of financial consumers, all loan products should be explicit loan annualized interest rate.

Announcement, points out that all the institutions engaged in loan business, on websites and mobile applications, the marketing channels such as posters, should be to show the obvious way to borrowers annualized interest rates, and the same shall be in when signing a loan contract, also can according to need to display the information such as daily rate, interest rate at the same time, but should not be more obvious than to change interest rates.

In addition, institutions engaged in loan business include but are not limited to deposit financial institutions, auto finance companies, consumer finance companies, small loan companies and Internet platforms that provide advertising or display platforms for loan business.

The statement said the annualized interest rate should be calculated in proportion to all the loan costs charged to the borrower and the actual loan principal occupied, and translated into annualized form. Among them, the loan cost should include interest and all kinds of expenses directly related to the loan. The principal of the loan shall be specified in the loan contract or other creditor’s right documents. If installment repayment is adopted, the actual occupied loan principal shall be calculated based on the remaining principal after each installment repayment.

The statement also said the annualized interest rate on the loan can be calculated using compound or simple interest. The compound interest calculation method is the internal rate of return method. See the attachment for specific examples. If the calculation method is simple interest, it shall be stated that it is simple interest.

Announcement, encourage private lending to refer to the implementation of this announcement.

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