5% interest is not usury. The 5% interest rate is converted into an annual interest rate of 6%. The one-year loan market quoted interest rate published by the National Interbank Funding Center authorized by the People's Bank of China on March 22, 2021 is 3.85%, not more than four times the one-year loan market quoted interest rate.
Legal basis
Article 25 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases, if the lender requests the borrower to pay interest at the interest rate agreed in the contract, the people's court shall support it, except that the interest rate agreed by both parties exceeds four times the market quoted interest rate of one-year loan when the contract is established.
The term "one-year loan market quoted interest rate" as mentioned in the preceding paragraph refers to the one-year loan market quoted interest rate issued monthly by the National Interbank Funding Center authorized by the People's Bank of China as of August 20, 2019.
