When money is urgently needed, some citizens will choose to find a small loan company to raise money. However, you must pay attention to the loan contract agreement and beware of the trap of standard terms, which will increase the actual loan cost.

is in urgent need of money, some citizens will choose to find a small loan company to raise money. However, you must pay attention to the loan contract agreement and beware of the trap of standard terms, which will increase the actual loan cost.

In August 2018, Zhou signed a loan contract with a micro-loan company, with the agreed loan amount of 150,000 yuan, the annualized comprehensive real interest rate was 13.08%, and the repayment was based on the 24th period of equal principal and interest , and the calculation method of the repayment amount for each period was agreed in the standard terms.

Plaintiff Zhou believes that part of the principal is returned in each period by equal principal and interest, and the remaining principal should be reduced periodically. However, the interest repayed in each period is calculated based on the initial principal of RMB 150,000. The 23 periods of principal and interest that have been repaid exceed the amount calculated at the interest rate stated in the contract, and the microfinance company is required to return the extra amount of RMB 10,197.

repeated coordination failed, and Zhou sued the microfinance company in October 2020.

The defendant argued that the loan contract involved in the case was the true expression of intention of both parties, and a specific calculation formula for "equal principal and interest" has been agreed. The plaintiff did not raise any oral or written objections during the signing of the contract and the subsequent 23rd period of repayment, and there were no legal acts that resulted in the invalidity or revocation of the contract signing.

After trial, the Guangzhou Internet Court held that the annualized interest rate of the loan stated in the loan contract in this case was 13.08%, and it was repaid in the form of equal principal and interest. At the same time, the standard terms stipulate that the interest on each period is calculated based on the initial loan principal. This standard terms change the usual calculation method of equal principal and interest in each period that should be calculated based on the remaining principal at the beginning of the period. The annualized interest rate is nearly 23.39%, resulting in the actual loan interest rate seriously higher than the annualized interest rate of the loan explicitly stated in the contract, which increased the repayment burden of the lender.

The court pointed out that as a professional institution for microfinance business, the defendant should promptly, truthfully, accurately and comprehensively disclose the annualized interest rate and corresponding repayment methods of the loan products he provided to financial consumers. The defendant has no evidence to prove that he has fulfilled his obligation to remind or explain in relation to the standard terms. Therefore, the court found that the standard terms in the contract regarding the calculation of the repayment amount for each period were invalid. The plaintiff requested the interest to be calculated based on the remaining principal at the beginning of the period and at an annual interest rate of 13.08%, which is in line with the trading habits and the principle of integrity. He claimed that the defendant should refund the extra money collected. The court supported it and made the above judgment.

Judge reminds: Strictly follow the implementation of the annualized loan interest rate

. The presiding judge pointed out that in recent years, some Internet micro-loan companies have attracted borrowers to make loans online at the surface at a lower interest rate, but the general interest rate calculation method has been adjusted in the contract by changing the principal calculation amount, and thus changing the actual interest rate standard. At the same time, the number of electronic contracts used for loans is nearly 100, and it is difficult to fully understand the contract content through a small mobile phone screen. When a borrower as an ordinary financial consumer signs a loan contract, it is difficult to discover or identify the differences in calculation methods through short-term reading of the contract, resulting in an increase in actual loan costs. Although it is important to attract customers, it is clear that the annualized interest rate of loans and strictly comply with the implementation, and to build an honest and trustworthy market environment is more important for the development of Internet micro-loan companies and even the entire industry. Online loans also need to respect the true intention of financial consumers to purchase financial products . For terms that have a significant interest in financial consumers, such as the quantity of loans, interest rates, repayment methods, precautions, risk warnings, dispute resolution, etc., they should be reminded and explained in accordance with the principle of integrity and in a way that is sufficient to attract the attention of financial consumers, so that the standard terms are easier to obtain and identify, and better create a fair, just, honest and compliant market environment.

text, pictures/Guangzhou Daily. Xinhuacheng reporter charter correspondent Yu Qing Duan Liqiong Liu Wentian Guangzhou Daily·Xinhuacheng Editor: Zhang Yu