Reprinted from: Jinan Intermediate People's Court News Center
Jinan citizen Ge borrowed more than 200,000 yuan from China Construction Bank, but when the loan expired, Ge failed to repay in time. Originally, Ge thought that it was not enough yet, and it would be okay to pay more interest if he had money. However, he did not expect that China Construction Bank would charge a penalty interest of 50, and he took Ge to court. So is CCB’s 50 penalty interest rate legal?
In 2017, the defendant Ge signed 5 "China Construction Bank "Quick E-Loan" Loan Contracts" on China Construction Bank's online banking, borrowing 93,500 yuan, 17,400 yuan, 56,700 yuan, and 56,700 yuan respectively. 43,700 yuan, 13,300 yuan, totaling 224,600 yuan. The loan term is one year. The interest rate for the first four tranches of loans is 5.6 per annum, and the interest rate for the fifth tranche is 6.6 per annum. The penalty interest rate is 50% higher than the loan interest rate. After the loan expired, the defendant Ge failed to repay the principal, which constituted a breach of contract. The plaintiff filed a lawsuit in the Shizhong District People's Court of Jinan City, requiring the defendant to repay the loan and pay interest (including penalty interest and compound interest). The defendant Ge had no objection to the loan facts and the amount owed, but requested the court to review whether the basis for calculating the penalty interest claimed by the plaintiff complied with legal provisions.
The court held that
The electronic loan contract signed by the plaintiff and the defendant through the online banking process was the true expression of intention of both parties. The content did not violate the prohibitive provisions of our country's laws and regulations, and was legal and valid. After the loan contract is signed, both the plaintiff and the defendant should abide by the principle of good faith and actively perform their contractual obligations. The plaintiff submitted five pieces of evidence, including the "Fund Flow Statement", "Statement of Statement", and "Settlement List" (Details of Arrears), which can prove the fact that the plaintiff performed the loan to the defendant as stipulated in the contract, and the defendant recognized this fact. After the loan matured, the defendant failed to repay the principal and interest of the loan as stipulated in the contract, which constituted a breach of contract and should bear corresponding liability for breach of contract in accordance with the contract. The People's Bank of China clearly stipulates that the interest, penalty interest, and compound interest after the loan is overdue shall be charged an additional 30-50% based on the loan interest rate stipulated in the loan contract. This case involves the standard for charging principal penalty and interest stipulated in the loan contract, which is 50% higher than the loan interest rate, which is in compliance with the regulations and the court approved it. The plaintiff Ge was required to repay the loan principal of 224,600 yuan, the loan interest as of September 18, 2018, 12,805.14 yuan, and the penalty interest of 6,365.88 yuan. The facts are clear, the evidence is sufficient, and the court supports it. Afterwards, the defendant should also pay loan interest (including penalty interest) in accordance with the contract. The contract did not stipulate the charging of overdue interest penalty interest (compound interest). The court did not support the plaintiff’s request for the defendant to pay compound interest.
The judgment of the court of first instance
The defendant Ge repaid the bank loan principal of 224,600 yuan; the loan interest as of September 18, 2018 included penalty interest of 19,171.02 yuan and since September 2018 The loan interest (including penalty interest) calculated according to the loan contract from the 19th to the actual repayment date of the loan principal and interest. Related questions and answers: