Refine Personal Loan Business Interest and Fee Information Disclosure

According to the website of the National Financial Regulatory Administration (hereinafter referred to as the “Financial Regulatory Administration”) on March 15, to maintain order in the personal loan market, protect the legitimate rights and interests of financial consumers, and improve the quality and efficiency of financial services, the Financial Regulatory Administration and the People’s Bank of China jointly issued the “Regulations on Clear Disclosure of Comprehensive Financing Costs for Personal Loan Business” (hereinafter referred to as the “Regulations”), which will come into effect on August 1, 2026.

“In recent years, China’s personal loan market has developed rapidly, playing a positive role in promoting personal consumption, business operations, and supporting the steady and healthy development of the national economy,” said officials from the Financial Regulatory Administration and the People’s Bank of China. At the same time, issues such as irregularities and lack of transparency in the disclosure of interest and fee information for personal loans have emerged, which can easily lead to financial consumer disputes, affect the effectiveness of interest rate policies, and weaken the quality and efficiency of financial services to the real economy. It is necessary to formulate and implement relevant regulatory provisions to clarify the scope, operational methods, and procedures for disclosing interest and fee information for personal loans, define responsibilities of all parties, better protect the legitimate rights and interests of financial consumers, facilitate the transmission of financial policies benefiting the people, and promote industry standardization and healthy development.

The Regulations consist of 11 articles and are based on the existing framework of loan information disclosure regulation. They specify the scope, operational methods, and procedures for disclosing interest and fee information for personal loans, requiring lenders to present a clear comprehensive financing cost statement, disclose personal loan interest and fee costs transparently, and effectively implement the disclosure requirements for personal loan interest and fee information.

To accurately and comprehensively reflect the actual financing costs borne by borrowers in personal loan transactions, the Regulations include all costs related to personal loans into the comprehensive financing cost, including but not limited to interest, installment fees, credit enhancement service fees, and other financing costs under normal performance, as well as potential costs such as overdue penalty interest in case of default. Borrowers should pay attention to the comprehensive financing costs when applying for personal loans, fully understand the items, collection methods, standards, annualized rates, collection entities, and default responsibilities associated with financing costs.

The Regulations require that, for on-site personal loan transactions, borrowers must sign and confirm the comprehensive financing cost statement before signing the loan agreement or initiating installment payments. For online personal loan transactions, the comprehensive financing cost statement must be displayed via a pop-up window, with a mandatory reading period, and confirmed by the borrower before signing the loan agreement or initiating installments. In online consumption scenarios involving installment payments, the comprehensive financing costs should be clearly displayed in a prominent manner on the payment page of the order.

The comprehensive financing cost statement should specify the principal amount, itemize each interest and fee charged by the lender and its partner institutions, including collection methods, standards, and responsible entities, and calculate the annualized comprehensive financing cost for normal performance. It should also itemize potential costs and responsible entities in cases of default, such as overdue or misappropriated funds.

In online consumption scenarios involving installment payments, the payment page must prominently display the principal amount, installment plan, service fees, responsible entities, the annualized comprehensive financing cost under normal performance, and potential costs and responsible entities in default scenarios.

Both the comprehensive financing cost statement and the online payment page for installment transactions must clearly indicate that, aside from the explicitly disclosed costs, the lender and its partners will not charge any other interest or fee related to the loan.

The responsible officials stated, “To promote standardized operation of the comprehensive financing cost disclosure, we have developed sample forms for the disclosure and a sample display for installment payment pages in online consumption scenarios. We will also guide relevant industry associations and self-regulatory organizations, such as the China Banking Association, China Internet Finance Association, and the Market Interest Rate Pricing Self-Regulation Mechanism, to leverage industry self-discipline to support the implementation of these requirements.”

“Considering that lenders need to adjust their business processes, systems, and modify cooperation agreements, the Regulations will be implemented from August 1, 2026. Relevant entities should prepare accordingly in accordance with the Regulations. When the Regulations come into force, the ‘new-old’ distinction will be applied, and new business activities must strictly follow the disclosure requirements for comprehensive financing costs,” the officials added.