China News Service, March 31. According to the website of the central bank, the central bank recently announced that in order to maintain the order of competition in the loan market and protect the legal rights and interests of financial consumers, all loan products should clearly indicate the annualized loan interest rate.

　　The announcement pointed out that all institutions engaged in loan business should display the annualized interest rate to the borrower in an obvious way when marketing on websites, mobile applications, posters and other channels, and specify it when signing the loan contract. Display information such as daily interest rate and monthly interest rate at the same time as needed, but it should not be more obvious than the annualized interest rate.

　　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 businesses.

　　The announcement mentioned that the annualized loan interest rate should be calculated based on the ratio of all loan costs charged to the borrower and the loan principal actually occupied, and converted into an annualized form.

Among them, the loan cost should include interest and various expenses directly related to the loan.

The principal of the loan should be stated in the loan contract or other debt certificates.

If the principal is to be repaid in installments, the actual loan principal should be calculated based on the remaining principal after each instalment repayment.

　　The announcement also stated that the annualized loan interest rate can be calculated using compound interest or simple interest methods.

The compound interest calculation method is the internal rate of return method. See the attachment for specific examples.

If the calculation method of simple interest is adopted, it shall be stated as simple interest.

　　The announcement stated that private lending is encouraged to follow this announcement.