Starting August 1, the Regulation on Transparent Comprehensive Financing Costs for Personal Loans (the Regulation) will officially come into effect. On July 31, six major banks—Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC), China Construction Bank (CCB), Bank of Communications (BoCom), and Postal Savings Bank of China (PSBC)—have all disclosed the upper limits of comprehensive financing costs for personal loans.
For instance, ICBC’s announcement on Friday, titled Disclosure of Annualized Comprehensive Financing Cost Cap for Normal-Performance Personal Loans, shows that under normal repayment conditions, the annualized interest rate cap for newly issued personal consumption loans (excluding credit card loans) and personal business loans is 6%. For residential mortgage loans, the cap is set at the 1-year Loan Prime Rate (LPR) plus 0.5% for terms of five years or less, and at the 5-year LPR plus 0.5% for terms exceeding five years. The notice clarifies that these caps apply only to loans under normal repayment, while actual lending rates are determined by the loan contract signed between the bank and the client.
The six major banks issued similar statements, emphasizing that their personal loans are priced on a differentiated basis. Under normal repayment, all fees and interest items for personal loans are converted to an annualized level as per People’s Bank of China (PBOC) regulations, with the total not exceeding the state-mandated upper limit. The disclosure takes effect from August 1, 2026.
Some joint-stock banks, city commercial banks, and consumer finance companies had already issued related announcements. For example, Hengfeng Bank released a notice on July 24 about transparent comprehensive financing costs for personal loans, and on July 31 disclosed that its comprehensive financing cost cap is 24%, subject to the loan contract. Qilu Bank announced on July 30 that starting August 1, all new personal loans—including residential mortgage, personal consumption, and personal business loans—will follow the transparent comprehensive financing cost management requirements, with an annualized cap of 18%.
Under the Regulation, lenders must provide borrowers with a transparent comprehensive financing cost table when conducting personal loan business. This table must detail the loan principal, list all fees and interest items charged by the lender and its partners, including their collection methods, rates, and entities. It must also calculate the annualized comprehensive financing cost for borrowers under normal repayment. Additionally, the table must specify potential costs in case of default or misuse, along with their collection standards and entities. All fee standards under normal repayment must be annualized in line with PBOC requirements. The table must also explicitly state that no additional loan-related fees beyond those disclosed will be charged.
The Regulation defines comprehensive financing costs for personal loans as all interest and fees borne by the borrower, including loan interest, installment fees, credit enhancement service fees under normal repayment, and penalties for default. Lenders must determine these costs reasonably and legally. The rules cover commercial banks, rural cooperative banks, rural credit cooperatives, auto finance companies, consumer finance companies, corporate finance companies, trust companies, small-loan companies, and other financial institutions and local financial organizations, as well as third-party partners in marketing, credit enhancement, and other areas.
Industry insiders believe the Regulation will promote more standardized and transparent personal loan fees, protect financial consumer rights, and enhance the efficiency of policy transmission.