Microbank, the first Internet bank in mainland China, provides a small and short-term loan product, mainly for individual business and micro-enterprises. And what exactly is the interest on microbanks? It is analysed from the following angles。

What's the interest on microbanks

I. Calculation of interest on micro-bank micro-credit

The interest-bearing method of micro-credit from microbanks is that of the month in which interest is charged, i.e. from the day following the loan, until the day before the next repayment date. As a result, interest on the loan could be reduced if the client paid in advance. Interest rates on loans are divided into floating and fixed loan rates. Among them, floating interest rates fluctuated according to factors such as the market rate for loans and personal credit, while fixed rates were determined by consultation between microbanks and clients. Specific loan rates vary between clients depending on the individual situation。

Level of interest rate on microbank micro-credit

TO DATE, INTEREST RATES ON MICRO-CREDIT FROM MICRO-BANKS HAVE BEEN RELATIVELY LOW AND, ACCORDING TO DATA PUBLISHED BY BANKS, INTEREST RATES ON BANK MICRO-CREDITS VARY FROM 6%-18%. OF THESE, 6%-12% APPLIES TO GOOD CUSTOMERS AND 13%-18% APPLIES TO GENERAL CUSTOMERS. MICROBANK INTEREST RATES ON MICRO-CREDITS ARE MORE FAVOURABLE THAN THOSE OF OTHER FINANCIAL INSTITUTIONS。

III. Factors affecting interest on microbank micro-credit

In addition to interest rates per se, there are other factors that affect interest on client microloans, including:

1. Customer Credit Amounts: Given the fact that banks have always emphasized risk as the primary consideration, the size of the customer ' s Credit Amount will have an impact on interest. Typically, clients with a higher level of credit can obtain lower interest rates。

Personal credit records: The client's personal credit records directly affect the assessment of his credit levels by microbanks. Better credited customers can eventually get lower micro-credit rates。

3. Mortgage value: For loans requiring collateral, the value of the collateral will directly affect the interest rate on micro-credit。

How can clients reduce interest on micro-bank micro-credit

1. Advance repayments: Early repayments of microfinance loans are generally free of charge and interest is reduced accordingly。

2. Upgrading credit ratings: Clients can obtain lower interest rates for micro-credit by increasing their own credit ratings。

3. Provision of guarantees or guarantees: In the case of customers at certain risk, additional guarantees or guarantees may be provided in order to obtain a better interest rate on micro-credit。