Court Awards CNY 300,000 Loan Repayment with Interest

In a civil dispute over an unpaid personal loan, the court ruled in favor of the lender, ordering the borrower to repay the principal of 300,000 CNY together with monthly interest at a rate of 2 percent. The case involved a loan agreement dating back to 2008 and addressed the calculation of interest payments after the borrower defaulted. The court’s decision was based on the evidence of a written promissory note and the parties’ admissions during the hearing.

The plaintiff, Mr. Tang, filed the lawsuit against the defendant, Mr. Bei, on March 5, 2012. Mr. Tang alleged that on August 15, 2008, Mr. Bei borrowed 300,000 CNY for business working capital needs. On that day, Mr. Bei issued a handwritten promissory note stating that he borrowed the sum from Mr. Tang, who was associated with an engineering company in Eastern China City. The note set the interest rate at 2 percent per month, referencing customary private lending rates. Mr. Tang claimed that after the loan was made, Mr. Bei made only a few interest payments and then ceased all payments, leaving the principal unpaid and an outstanding interest amount of 186,000 CNY. Mr. Tang sought repayment of the principal plus monthly interest at 2 percent from the original loan date until full settlement, along with litigation costs.

During the court hearing, Mr. Tang’s legal representative, Mr. Wang, presented the original promissory note as evidence. Mr. Tang also explained that an earlier loan of 500,000 CNY from 2007 had been partially repaid in 2008, and the current promissory note replaced the outstanding balance of 300,000 CNY. He further stated that Mr. Bei had paid interest for a few months, so the interest claim was calculated from May 1, 2009 onward. Mr. Bei attended the hearing and admitted borrowing the money but argued that he had already paid several months of interest and now lacked the financial means to repay. He asked the court to waive the interest obligation. Mr. Bei did not provide any documentary evidence to support his claims. The court reviewed the promissory note, which Mr. Bei did not dispute, and accepted it as valid proof of the loan agreement.

The court found that a clear creditor-debtor relationship existed between Mr. Tang and Mr. Bei. Both parties agreed on the fact of the loan and the principal amount of 300,000 CNY. The court confirmed that Mr. Bei was legally obligated to repay the principal and the agreed interest. Because Mr. Bei had made some interest payments before stopping, the court accepted Mr. Tang’s calculation that interest should run from May 1, 2009, rather than from the original 2008 date. The court ruled that the interest rate of 2 percent per month (expressed as 20 per thousand) was within the legal framework for private lending at the time. Accordingly, the court ordered Mr. Bei to repay the principal of 300,000 CNY within ten days of the judgment’s effective date, plus interest at the rate of 20 per thousand per month from May 1, 2009 until the date of full repayment.

The legal basis for the decision rested on Articles 205 and 206 of the Contract Law of the People’s Republic of China. Article 205 requires a borrower to pay interest according to the agreed schedule, and Article 206 requires repayment of the principal at the agreed time or upon demand. The court also noted that Mr. Bei failed to present any evidence to support his request to waive interest. The court emphasized that the written promissory note clearly set the interest rate, and Mr. Bei’s partial payment of interest did not extinguish his continuing obligation. The judgment also included a provision for double interest on delayed payment if Mr. Bei failed to comply within the specified period, as stipulated in the Civil Procedure Law.

This case illustrates the importance of maintaining clear written loan documentation and the consequences of default in private lending disputes. The court’s ruling upheld the lender’s right to recover both principal and interest as agreed. Mr. Bei was also ordered to bear the reduced court costs of 2,900 CNY. The judgment is subject to appeal within fifteen days of service. The case serves as a reminder that borrowers who admit liability but cite financial hardship are unlikely to obtain relief from contractual interest obligations without strong evidence or legal grounds.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.