Starting August 1, a new regulation will take effect, requiring lenders to disclose a clear summary of all financing costs for personal loans. This includes marketing tactics like "free first month" or "daily interest of just 3 yuan on a 10,000 yuan loan," which will now face strengthened oversight. The Personal Loan Business Comprehensive Financing Cost Disclosure Regulation, issued in March, mandates that commercial banks, auto finance companies, consumer finance companies, and small loan companies provide borrowers with a standardized table revealing the total cost of borrowing. With the nearly five-month transition period ending, financial institutions are in a final sprint to comply.
Lou Feipeng, a researcher at the Postal Savings Bank, commented on July 29 that the comprehensive financing cost table will make loan interest rates and fees more transparent. This helps standardize financial institutions' practices, allowing borrowers to clearly understand the full cost, including interest and various charges, thereby protecting their rights. It also enables consumers to easily compare costs across different institutions and products, optimizing their borrowing decisions. Furthermore, the table consolidates all interest and fees for personal loans, making it easier for regulators to conduct oversight, curb hidden charges, and foster a fairer, more transparent credit environment.
Multiple institutions are now advancing these changes. Xiamen Bank announced on July 20 that starting August 1, 2026, all new personal loans, including mortgages, consumer loans, and business loans, will comply with the comprehensive financing cost disclosure requirements. For in-person loans, borrowers must sign the Personal Loan Comprehensive Financing Cost Disclosure Table when signing the contract. For online loans, the bank will display the table via a pop-up window for customer confirmation. The bank has also set a cap on the annual comprehensive financing cost for normal performance, with a maximum of 24%.
Jilin Bank issued a similar announcement on July 23, setting a cap of 18% for the annual comprehensive financing cost on personal loans under normal performance. This cost includes loan interest, installment fees, and credit enhancement service fees. The bank specifically noted that, aside from the items listed in the table, no other fees related to the loan will be charged by the bank or its partners.
Hengfeng Bank announced on July 24 that it is progressively implementing the personal loan comprehensive financing cost disclosure policy, with full compliance required by August 1, 2026. The disclosure table will list all financing costs, including the loan principal, cost items, fee collection methods, annualized rates, and the entities collecting the fees. It will also detail the costs associated with default scenarios, such as late payment penalties.
Consumer finance companies are also accelerating their efforts. China Post Consumer Finance recently released a Comprehensive Financing Cost Disclosure Table covering loan principal, interest, credit enhancement fees, annualized comprehensive costs for normal performance, early repayment penalties, and late payment fees. A company representative noted that the key challenges in implementing the regulation include standardizing the calculation of various fees, upgrading all distribution channels, and coordinating with third-party partners. For example, the diverse and complex nature of personal loan fees required a specialized task force to standardize the calculation methods.
Previously, some institutions used misleading tactics like "low daily interest" or "low monthly fees" to lure borrowers, who later discovered hidden charges such as guarantee fees, service fees, or membership fees. This resulted in a significant gap between advertised and actual annualized interest rates, increasing borrower costs. Black Cat Complaints, a consumer platform, has nearly 20,000 complaints about "low interest" or "low rates." In May, a user reported that a lending platform displayed a low daily rate but then deducted money without requiring a password. Another user in June complained about a platform that advertised low interest but enticed them to buy a membership card, resulting in over 20,000 yuan in annual interest and 5,000 yuan in interest penalties for early repayment, all without a contract. Some users noted that guarantee fees after repaying a loan were higher than the interest itself.
A regional financial regulatory bureau previously stated that some loan assistance platforms charged unreasonable fees under names like "membership fees," "consulting fees," or "credit enhancement services," often through default selections or mandatory authorization, leading to excessive debt burdens for consumers unaware of the charges. The March 15 regulation from the State Administration for Financial Regulation and the People's Bank of China directly targets these issues, requiring financial institutions to provide a clear Comprehensive Financing Cost Disclosure Table. The regulation, effective August 1, 2026, mandates that the table list the loan principal and detail all fee items, collection methods, rates, and entities. It must calculate the annualized comprehensive financing cost for normal performance. It also requires listing costs for default scenarios like late payment or misuse of funds. All fee items under normal performance must be converted to annualized rates as per the People's Bank of China's announcement. The table must also state that no other fees beyond those listed will be charged. For in-person loans, borrowers must sign the table before signing the loan contract. For online loans, the table must be displayed via a pop-up with a mandatory reading time for borrower confirmation before contracting.
The China Post Consumer Finance representative believes the regulation provides comprehensive protection for borrowers. Firstly, it ensures all loan costs are transparent upfront, ending the era of vague pricing and information asymmetry. Secondly, it standardizes fee calculation across the industry, making costs comparable and helping borrowers choose rationally. Thirdly, it standardizes the loan service process from the start, significantly improving transparency and standardization. Lou Feipeng advised consumers to carefully read the comprehensive financing cost table before applying for a personal loan, ensuring a full understanding of interest rates, fee standards, and collection entities, and confirming there are no other costs. Borrowers should focus on the comprehensive financing cost, fully understanding the items, collection methods, rates, annualized levels, collecting entities, and liability for breach of contract.