Court Orders Repayment of CNY 300,000 Loan in Dispute
A civil dispute over a personal loan of CNY 300,000 has been resolved by a court in Eastern China City. The plaintiff, Mr. Li, sued the defendant, Mr. Wang, for repayment of the principal and interest after the defendant stopped making monthly payments. The court examined evidence of the loan and the payments made, ultimately ruling that the defendant must repay a reduced principal of CNY 276,000 plus interest at the legal benchmark rate.
The case arose from a loan agreement made on March 28, 2011. According to the plaintiff, Mr. Li lent CNY 300,000 to Mr. Wang through a friend’s introduction. The parties allegedly agreed orally on a monthly interest rate of 2 percent. Mr. Wang issued a handwritten promissory note for the loan, and on the same day, Mr. Li transferred the full amount of CNY 300,000 to Mr. Wang’s bank account via a bank in Eastern China City. Thereafter, Mr. Wang made monthly payments of CNY 6,000 from April to July 2011, totaling CNY 24,000. After those payments, Mr. Wang stopped making further payments, and Mr. Li’s repeated requests for repayment were unsuccessful. Mr. Li then filed a lawsuit on February 9, 2012, seeking the return of the full principal and interest at the agreed 2 percent monthly rate from July 29, 2011 until full repayment.
During the court hearing on March 30, 2012, Mr. Li appeared through his legal representative, Mr. Ding. The defendant, Mr. Wang, did not attend the hearing despite receiving proper notice, and the court proceeded with the trial in his absence. Mr. Li submitted three pieces of evidence: a copy of his ID card along with a police-issued record of Mr. Wang’s identity, the original promissory note dated March 28, 2011 signed by Mr. Wang, and a bank transfer receipt showing the deposit of CNY 300,000 into Mr. Wang’s account. Since Mr. Wang failed to appear, he was deemed to have waived his right to challenge or cross-examine the evidence. The court reviewed the documents and found them to be objective, relevant, and lawful, and admitted them as valid evidence.
The court found that a valid loan relationship existed between Mr. Li and Mr. Wang. The promissory note clearly reflected Mr. Wang’s intention to borrow the money, and the bank transfer confirmed that the funds were delivered. However, the court noted that the loan agreement did not specify any interest rate. Mr. Li claimed that the parties had orally agreed on a 2 percent monthly interest, but the court determined that this assertion lacked supporting evidence. Consequently, the court ruled that the CNY 24,000 already paid by Mr. Wang could not be treated as interest payments. Instead, those payments were applied to reduce the principal, bringing the outstanding principal down to CNY 276,000.
In its legal analysis, the court applied the principle that when a loan does not contain a clear interest clause, the lender may not claim a specific interest rate without proof of agreement. Under relevant civil law and judicial interpretations, the lender is entitled to recover the principal and may claim interest as damages for delayed repayment. The court set the interest rate at the benchmark lending rate published by the People’s Bank of China for a six-month loan, which was 6.1 percent per annum as of the date the lawsuit was filed. The interest was calculated from February 9, 2012, the date Mr. Li initiated the lawsuit, until the date of full repayment. The court further noted that Mr. Wang’s failure to attend the hearing did not prevent the court from deciding the case based on the evidence presented.
The court issued a judgment ordering Mr. Wang to repay Mr. Li the remaining principal of CNY 276,000 plus interest at an annual rate of 6.1 percent, calculated from February 9, 2012 until the judgment is fully satisfied. All other claims by Mr. Li, including the demand for interest at 2 percent per month, were rejected. The court also ordered Mr. Wang to bear half of the litigation costs, amounting to CNY 3,215, and warned that failure to pay on time would result in double interest for the delay. This case underscores the importance of clearly documenting the terms of a loan, especially any agreed interest rate, as oral agreements may be difficult to enforce in court.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.