No rush to pay off loans by year end

Chinese borrowers burdened by loans used to try to pay them off by year's end. But there is no expectation of such a rush this year, even though the central bank has raised interest rates five times this year.

Chen Sisi is a client manager at the Bank of Communications in Chongqing city. Previously, at this time of the year, most of her work dealt with people paying off their loans in advance. But now she fills her time helping clients finance their investments.

Chen said "Usually at this time of year, I would have four to five clients a week coming to me to arrange to pay off their loans. But this year, we three client managers have had a total of ten appointments for the whole month."

Mortgage rates have risen nearly one percent to 7.83 percent this year, the highest jump in recent years.

Zheng Yong, Senior Manager of Bank of Communications in Chongqing said "Take as an example, a 20-year 200,000 yuan loan. The monthly payment on that will increase by 120 yuan next year."

Industry insiders say although the central bank has raised the interest rate five times this year, most borrowers still find the figure acceptable. The government is planning tighter loan policies for next year, which makes borrowers not want to pay back their loans in advance.

Zheng said "People have various ways to invest now, and their investment ideas are maturing. They will calculate by themselves which way is more profitable for them."

Commercial banks in Chongqing say even though financial policies will be adjusted next year, they should not greatly impact individual loans. Bank will still guarantee those qualified loans.