What are the invalid terms of private loans?

The loan contract needs to comply with the provisions of the Contract Law and relevant judicial interpretations on interest rates, otherwise it will be subject to legal regulations, especially invalid regulations on excessively high loan interest rates. The following clauses in the loan are invalid: 1. The lender shall not include the interest in the principal for usury.

During the trial, if it is found that the creditor includes the interest in the principal to calculate compound interest, if the interest rate exceeds the limit specified in Article 6, the interest on the excess part shall not be protected. 2. A private contract in which a legal person or other organization that is not a bank or a financial institution acts as a lender shall be invalid. 3. In private lending, if the lender clearly knows that the borrower is borrowing money for the purpose of carrying out illegal activities, the invalidity of the loan contract is not protected by the Contract Law, and according to the provisions of the Contract Law, if one party uses fraud and coercion or other means or takes advantage of the danger of others to cause the other party to conclude a contract contrary to its true intentions, the injured party has the right to request the people's court or arbitration institution to modify or revoke the contract.

IV. According to the provisions of the judicial interpretation, if a lender or a contributor who is actually a loan in association between enterprises has not yet obtained the agreed interest, the people's court shall confirm that the loan contract or joint venture contract relationship between the two parties is invalid during the trial, and the interest agreed upon by the two parties shall be collected in accordance with law.

1. The private loan contract violates the relevant provisions of the Contract Law on interest rates, stipulating that the interest exceeds 4 times the upper limit of the loan interest rate issued by the People's Bank of China, such interest is usury, the interest clause is invalid, and the excess part is not protected by the Contract Law.

2. There is a compound interest clause in the private loan contract.

3. A private loan contract in which a legal person or other organization that is not a bank, a non-financial institution or a lender is an invalid contract.

4. If the subject of a private loan contract is a natural person, and the natural person's capacity for conduct is defective, the validity of the private loan contract is also defective.

5. According to Article 54 of the Contract Law, if one party concludes a contract contrary to its true intention by means of fraud, coercion or other means, or by taking advantage of the danger of others, the injured party has the right to request the people's court or arbitration institution to modify or revoke the contract. The injured party's right of modification or revocation shall be exercised in accordance with law.

6. In the private loan contract relationship, if the lender clearly knows that the borrower borrows money for the purpose of carrying out illegal activities, the loan contract is invalid and is not protected by the Contract Law.

7. According to the relevant judicial interpretations, if the lender who borrows from each other between enterprises or the investor who is called an associate or actually a loan has not obtained the agreed interest, the people's court shall confirm that the loan contract or joint venture contract relationship between the two parties is invalid during the trial, and the interest agreed upon by the two parties shall be collected in accordance with the law.

1. Arbitrage of credit funds from financial institutions and relending them to the borrower at usurious interest, and the borrower knows in advance; 2. The funds obtained by borrowing from other enterprises or raising funds from the employees of the unit are then re-lented to the borrower for profit, and the borrower knows in advance; 3. The lender provides the loan even though the lender knows in advance that the borrower is borrowing money for illegal or criminal activities; Wait a minute.

Legal analysis: The invalidity of private loan clauses includes: 1. A private loan contract in which a legal person or other organization that is not a bank, a non-financial institution or a lender is an invalid contract.

2. If one party concludes a contract contrary to its true intention by means of fraud, coercion or other means, or by taking advantage of the danger of others, the injured party has the right to request the people's court or arbitration institution to modify or revoke the contract.

Legal basis: Civil Code of the People's Republic of China Article 500 Where a party has any of the following circumstances in the process of concluding a conspiracy agreement, and causes losses to the other party, it shall be liable for compensation:

1) Conducting negotiations in bad faith under the pretext of concluding a contract;

2) Deliberately concealing material facts related to the conclusion of the contract or providing false information;

3) Other conduct that violates the principle of good faith.

Legal analysis: The invalidity of private loan clauses includes: 1. The private loan contract of a non-bank source, a legal person or other organization of a non-financial institution as a loan is an invalid contract.

2. Where one party concludes a contract contrary to its true intention by means of fraud, coercion or other means, or by taking advantage of the danger of starvation, the injured party has the right to request the people's court or arbitration institution to modify or revoke the contract.

Legal basis: Article 500 of the Civil Code of the People's Republic of China If a party causes losses to the other party under any of the following circumstances in the process of concluding a contract, it shall be liable for compensation:

1) Conducting negotiations in bad faith under the pretext of concluding a contract;

2) Deliberately concealing important facts related to the conclusion of a contract or providing false information;

3) Other conduct that violates the principle of good faith.

Legal analysis: The invalid clauses in the private loan contract are: 1. The loan contract violates the provisions of the Contract Law on the interest rate; 2. The lender shall not include the interest in the principal for usury; 3. The private loan contract of a legal person or other organization that is not a bank or financial institution as a lender is an invalid contract; Wait a minute.

Legal basis: Article 470 of the Civil Code of the People's Republic of China The content of the contract shall be agreed upon by the parties and generally include the following clauses:

1) The names and addresses of the parties;

b) the subject matter; iii) quantity;

iv) Quality; Royal Chain.

5) Price or remuneration;

6) the period, place and method of performance;

7) Liability for breach of contract;

8) Methods of Dispute Resolution.

The parties may conclude a contract with reference to the model texts of various types of contracts.

A loan contract is invalid if:

1. Signed by a person who lacks capacity for civil conduct;

2. The perpetrator and the counterpart use false expressions of intent to carry it out;

3. The actor maliciously colludes with the counterpart, harming the lawful rights and interests of others;

4. Contrary to public order and good customs.

The legal lending relationship is protected by law, but civil acts that violate the law or the public interest are invalid. In any of the following circumstances, the people's court shall find that the private lending contract is invalid: (1) taking loans from financial institutions for re-lending; (2) Relending funds obtained by means such as borrowing money from other for-profit legal persons, raising funds from employees of that unit, or illegally absorbing deposits from the public; (3) Lenders who have not obtained lending qualifications in accordance with law, and provide loans to unspecified targets of society for the purpose of making profits; (4) The lender knew or should have known in advance that the borrower was borrowing money for illegal or criminal activities, but still provided the loan; (5) Violating mandatory provisions of laws or administrative regulations; (6) Violating public order and good customs.

Legal basis: Article 1 of the "Provisions on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases" The term "private lending" as used in these Provisions refers to the act of financing between natural persons, legal persons and unincorporated organizations. These Provisions do not apply to disputes arising from the issuance of loans and other related financial services of financial institutions and their branches established with the approval of the financial regulatory authorities to engage in loan business.

Article 2: When a person who lends money initiates a private lending lawsuit with the people's court, it shall provide proof of creditor's rights such as IOUs, receipts, and IOUs, as well as other evidence that can prove the existence of a legal relationship between the lenders. Where the creditor's rights vouchers such as IOUs, receipts, and IOUs held by the parties do not indicate the creditor, and the parties holding the creditor's rights vouchers file a private lending lawsuit, the people's court shall accept it. If the defendant raises a factual defense against the plaintiff's creditor qualifications, and the People's Basic People's Court finds that the plaintiff does not have the creditor qualifications after review, it rules to dismiss the lawsuit.

Article 24: Where the borrower and the borrower have not agreed on interest, and the lender claims to pay interest, the people's court will not support it. Where the agreement on interest in loans between natural persons is unclear, and the lender claims to pay interest, the people's court will not support it. Except for loans between natural persons, where the agreement between the borrower and the lender on the loan interest is unclear, and the lender claims the interest, the people's court shall determine the interest based on the content of the private loan contract and on the basis of factors such as the local or the parties' transaction methods, trading habits, and market interest rates.

Article 25 Where the lender requests the borrower to pay interest in accordance with the interest rate agreed in the contract, the people's court shall support it, except where the interest rate agreed upon by both parties exceeds four times the one-year loan market interest rate at the time the contract is concluded. The "one-year loan market ** interest rate" mentioned in the preceding paragraph refers to the one-year loan market ** interest rate authorized by the People's Bank of China to be released monthly by the National Interbank Lending Center from August 20, 2019.