Borrower and her bank settle dispute over loan

By Angela Xu | March 19, 2009, Thursday |

Print Edition

A WOMAN withdrew a lawsuit against her bank yesterday after the two sides came to an undisclosed agreement.

Fu Mingjian had wanted the bank to return a penalty she was charged for having paid off her mortgage early.

She had bought an unfinished apartment for about 2 million yuan (US$292,582) in November 2007 and applied for a loan of 1.4 million yuan from the Gaoqiao outlet of the Bank of Construction to be repaid over 22 years.

But because of the financial crisis, Fu and her husband's income reduced in the middle of last year and they had to sell the apartment back to the developer. They then asked the bank if they could clear the loan.

The bank agreed and the loan was paid off last September, 10 months after the contract had been signed. But there was a penalty charge of 13,226 yuan.

Fu said the bank hadn't mentioned this in negotiations and filed a lawsuit with Pudong New Area People's Court.

The bank said it had mentioned the penalty in addition to a clause regarding repayment in less than a year. Fu didn't object, so it believed she had accepted the clause.

The penalty was because early payment meant the bank lost future interest.

Society

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Borrower and her bank settle dispute over loan

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