Multiple banks have collectively disclosed their pricing boundaries for personal loans, just ahead of a new regulation that mandates greater transparency in cost reporting. The core shift in the personal credit market is not a uniform price adjustment, but the integration of interest rates and other related fees into a single annualized disclosure framework. On the evening of July 31, several lenders, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, Postal Savings Bank of China, along with China Merchants Bank, China CITIC Bank, Industrial Bank, and China Everbright Bank, published the upper limits of annualized comprehensive financing costs for personal loans under normal repayment conditions. These disclosures align with the "Regulations on Clearly Stating Comprehensive Financing Costs for Personal Loan Businesses," which took effect on August 1.

From the disclosed upper limits on annualized loan interest rates, a clear pricing hierarchy has emerged. For Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, the caps for both personal consumer loans and personal business loans stand at 6%. In contrast, Bank of Communications and Postal Savings Bank of China set their caps at 12%. For China Merchants Bank, China CITIC Bank, and Industrial Bank, non-cooperative consumer and business loans have a 12% ceiling, while cooperative personal internet loans are capped at 24%. China Everbright Bank further segments its products, with a personal business loan cap of 8%, its "Guangsu Loan" and "Guangsu Business Loan" products at 12%, and cooperative loans at 24%. All banks emphasize that personal loans are priced on a differentiated basis, and the disclosed figures represent upper limits under normal repayment, with the actual interest rate determined by the loan contract signed between the bank and the customer.

For borrowers, the primary change is easier cost comparison. For banks and their partner institutions, product pricing and fee structures will become more transparent. The big state-owned banks are divided into two tiers. Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank have largely consistent caps. Their personal consumer loans, excluding credit card loans, have a 6% annualized interest rate ceiling, as do their personal business loans. Notably, Agricultural Bank of China specifically includes farmer loans within the personal business loan category. For residential mortgages, the cap for terms of five years or less is the one-year LPR plus 0.5%, while for terms exceeding five years, it is the five-year-plus LPR plus 0.5%.

Bank of Communications and Postal Savings Bank of China employ a different tier. Both set the annualized interest rate ceiling for personal consumer and business loans at 12%, which is six percentage points higher than the first four state-owned banks. Their mortgage caps remain identical, using the same LPR-based formula. This means the six major state-owned banks are aligned on mortgage loan ceilings but split into two tiers for personal consumer and business loans. It is crucial to note that the 6% and 12% figures are upper limits. They do not represent the rate at which all customers will receive loans, nor do they imply that Bank of Communications and Postal Savings Bank of China will always have higher actual loan prices than other state-owned banks. All banks specify that these are rate ceilings, and the actual loan rate is based on the contract signed with the customer.

Among joint-stock banks, China Merchants Bank, China CITIC Bank, and Industrial Bank have disclosed a largely consistent structure for the upper limits of annualized comprehensive financing costs for personal loans under normal repayment, and they have singled out cooperative personal internet loans. For these three banks, personal consumer loans, excluding credit card loans and cooperative personal internet loans, have a 12% annualized interest rate ceiling. Personal business loans, excluding cooperative personal internet loans, also have a 12% ceiling. Cooperative personal internet loans, however, have a 24% ceiling. For residential mortgages, the three banks use the same LPR-based formula as the state-owned banks. The separate listing of cooperative personal internet loans is the most significant structural difference in the joint-stock banks' disclosures. The 24% cap applies only to these specific cooperative loans, not to all of a bank's personal consumer or business loans. China Everbright Bank offers a more detailed breakdown, with a 12% cap for personal consumer loans, 8% for personal business loans, 12% for its "Guangsu Loan" and "Guangsu Business Loan" products, and 24% for cooperative loans. This segmentation shows that even within the same bank, traditional personal business loans, online products, and cooperative loans can have different upper limits. For borrowers with specific needs, identifying the product category and application channel is equally important.

In contrast to the clear stratification in consumer and business loans, the upper limits for personal residential mortgages are highly convergent across all banks. Based on available disclosures, the annualized interest rate ceiling for mortgages with terms of five years or less is generally the one-year LPR plus 50 basis points, while for terms exceeding five years, it is the five-year-plus LPR plus 50 basis points. This arrangement means the mortgage cap is based on a floating benchmark rather than a fixed absolute interest rate. When the LPR changes, the cap changes accordingly. However, this cap is neither the actual execution rate nor the minimum rate. All banks retain room for differentiated pricing in their announcements, with the specific loan rate determined by the contract signed with the customer. China Merchants Bank also advises customers to reasonably assess their income and debt capacity, avoid excessive borrowing, and pay close attention to the total financing cost, including its components, collection methods, standards, annualized level, collecting entities, and penalty clauses for default.

The real change brought about by this concentrated disclosure is the move toward comprehensive cost reporting. The regulatory backdrop is the "Regulations on Clearly Stating Comprehensive Financing Costs for Personal Loan Businesses," issued by the National Financial Regulatory Administration and the People's Bank of China. According to the regulation, the comprehensive financing cost for a personal loan includes all interest and fees borne by the borrower that are related to the loan, including but not limited to loan interest, installment fees, credit enhancement service fees for normal repayment, and potential costs like overdue fines in default scenarios. Lenders must reasonably determine the annualized level of comprehensive financing costs. The regulation requires lenders to clearly disclose the upper limit of the comprehensive financing cost for personal loans under normal repayment conditions at business premises and on official websites. For in-person loan applications, the borrower must sign a comprehensive financing cost disclosure form before signing the loan contract or applying for an installment. For online loan applications, the lender must display the form via a pop-up, set a mandatory reading time, and have the borrower confirm before signing the contract or completing the installment. For installment payments in online consumption scenarios, the payment page must clearly and prominently show the loan principal, installment schedule, service fees and their collectors, the annualized comprehensive financing cost under normal repayment, and the potential cost items and collection standards in default. It must also explicitly state that no other fees beyond those disclosed will be charged. For banks, the impact primarily falls on information disclosure, product management, and partner channel management. With cooperative personal internet loans singled out, the fees charged by the bank and its partners, who collects them, and the resulting total comprehensive cost will be more directly visible to the borrower. Therefore, this round of centralized disclosure is more a reform of personal loan pricing transparency than a synchronized interest rate adjustment. The banks are publicizing the price boundaries they can charge; what the new regulation truly changes is how borrowers see and compare loan costs.

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