Video | How Many Hidden Fees Behind Low-Interest Gimmicks? New Personal Loan Regulations Clarify Standards to Protect Borrowers' Rights

“Low interest, no interest, instant approval”… Open your mobile app, and you’ll see such loan advertisements everywhere. But if you actually borrow, you’ll find hidden service fees, intermediary fees, guarantee fees, and even insurance costs beyond the interest. Many people are lured by the so-called “low interest” gimmick and end up drowning in debt. On March 15, the China Banking and Insurance Regulatory Commission and the People’s Bank of China officially released the “Regulations on Clear Disclosure of the Total Cost of Personal Loan Business.” How does this new regulation protect ordinary consumers?

For ordinary people, borrowing money is usually to solve urgent needs—perhaps for emergency cash flow, consumer spending, or temporary funding for small and micro enterprises. However, under the “information asymmetry” lending model, what should be simple borrowing becomes layered with additional charges and complex tricks. The real pain point isn’t the “interest rate,” but the concealment, misleading, and exploitation involved.

The most common tricks include “split charges.” For example, lenders only advertise a “monthly interest rate of 0.8%,” but do not mention that besides this interest, borrowers also have to pay 2%–5% “channel service fees,” 0.3% “guarantee fees,” and even mandatory bundled “account insurance fees.” These costs may seem “reasonably labeled,” but in fact, they are all part of the financing costs.

According to industry estimates and regulatory surveys, such opaque charges can cause the actual annualized cost to be 5–10 percentage points higher than the advertised rate. Many people only realize they’ve borrowed not a “low-interest loan,” but a “high-interest loan” after overdue penalties and interest pile up.

For lending agencies, “blurring operations” can quickly reduce customer acquisition costs and increase profits, creating a vicious cycle of “bad money driving out good.” Institutions that offer transparent and honest pricing are often eliminated by the market because their rates are “not attractive,” leading to worsening industry chaos.

This industry chaos is now being addressed with strict rules. On March 15, the China Banking and Insurance Regulatory Commission and the People’s Bank of China announced the “Regulations on Clear Disclosure of the Total Cost of Personal Loan Business,” which will take effect on August 1, 2026. According to the “new-old” separation principle, new business must strictly follow the regulation’s requirements for clear disclosure of the total financing cost. From “concealment” to “disclosure,” this mandatory transparency aims to break information barriers and set clear boundaries for the lending industry.

Zeng Gang, Chief Expert and Director of the Shanghai Financial and Development Laboratory: The document clearly stipulates that all fee items must be listed one by one, including the payers, collection methods, and standards. Based on this, the total financing cost should be converted into an annualized figure and publicly displayed at business locations, official websites, and other channels. This requirement has very strong protective significance for ordinary consumers. All these measures are important steps to extend consumer rights protection throughout the entire lending process.