Two Government Departments Release "Disclosure Regulations for Comprehensive Financing Costs of Personal Loan Business," Promoting Transparency and Sunlight Policy for Loan Costs

Everyday Economic Reporter | Yuan Yuan Everyday Economic Editor | Dong Xing Sheng

On March 15, the Financial Regulatory Administration announced on its official website that the State Administration of Financial Regulation and the People’s Bank of China issued the “Regulations on Clear Disclosure of Comprehensive Financing Costs for Personal Loan Business” (hereinafter referred to as the “Regulations”) to address issues of non-standard and non-transparent disclosure of interest and fee information in personal loan services.

The Financial Regulatory Administration stated that, considering the need for lenders to adjust business processes and systems, and to modify cooperation agreements, the Regulations will take effect on August 1, 2026. Relevant parties should prepare accordingly in accordance with the Regulations. When the Regulations come into force, new business activities must strictly follow the requirements for clear disclosure of comprehensive financing costs based on the “new-old cutoff” principle.

The comprehensive financing cost disclosure form should include the principal amount of the loan and each interest and fee item

In recent years, China’s personal loan market has developed rapidly, playing a positive role in promoting personal consumption, business operations, and supporting steady and healthy economic growth. At the same time, irregularities in interest and fee disclosures, especially in internet lending, have occurred from time to time. Industry insiders told the “Daily Economic News” that inadequate and non-standard disclosure of interest and fee information, and insufficient protection of consumers’ right to know, are important causes of these irregularities.

Against this background, the Regulations refine the scope, operational methods, and procedures for interest and fee disclosures within the existing regulatory framework for loan information disclosure. They require lenders to present borrowers with a clear disclosure form of comprehensive financing costs. Notably, the “comprehensive financing cost” here refers to all interest and fee costs borne by the borrower related to the loan, including both normal performance costs and potential costs under default scenarios such as late payment penalties.

The Regulations specify that the disclosure form should state the loan principal amount, itemize each interest and fee item charged by the lender and its partners, including the collection method, standard, and responsible entity. Based on this, the form should also calculate the annualized comprehensive financing cost under normal repayment conditions. Additionally, it should list potential costs and responsible entities in cases of default, such as late payments or misappropriation, along with their standards and responsible parties. The interest and fee standards for normal repayment should be converted into annualized rates according to requirements such as the “Announcement of the People’s Bank of China” ([2021] No. 3). The disclosure form must also clearly state that, aside from the costs already disclosed, lenders and their partners will not charge any other interest or fees related to the loan.

Furthermore, the Regulations provide operational requirements for three major scenarios: on-site personal loan processing, online personal loan processing, and online consumer installment payments. For online personal loans, the disclosure form should be displayed via a pop-up window, with a mandatory reading period, and the borrower must confirm before signing the loan agreement or proceeding with installment payments.

Officials from the relevant departments of the Financial Regulatory Administration and the People’s Bank of China stated: “To promote standardized operation of comprehensive financing cost disclosures, we have developed sample disclosure forms and examples of the comprehensive financing cost display on installment payment pages in online consumer scenarios. We will also guide industry associations such as the China Banking Association, the China Internet Finance Association, and the Market Interest Rate Pricing Self-Regulatory Mechanism to play their roles in industry self-discipline and support the implementation of these requirements.”

Experts: Better Protect Consumers’ Right to Know and Choose

Considering that lenders need time to adjust business processes, systems, and modify cooperation agreements, the Regulations will be implemented on August 1, 2026, providing about five months for preparation. When the Regulations are enforced, new business activities will strictly follow the requirements for clear disclosure of comprehensive financing costs based on the “new-old cutoff” principle.

Meanwhile, the Financial Regulatory Administration and the People’s Bank of China will further implement the concept of serving the people, strengthen coordination between central and local regulators, and guide the proper implementation of the Regulations to better protect the legitimate rights and interests of financial consumers and support high-quality economic and social development.

The reporter notes that during the China Central Bank’s work conference held from January 5 to 6 this year, the promotion of clear disclosure of personal loan comprehensive financing costs was proposed. Experts at that time pointed out that promoting clear disclosure has multiple positive implications: first, it helps address the “information asymmetry” in personal credit; second, it better safeguards consumers’ right to know and choose; third, it standardizes the loan market order and fosters a healthy financial ecosystem.

Now, with the issuance of the Regulations, a specific timetable for implementing the disclosure of comprehensive financing costs for personal loans has been established. Senior researcher Su Xiaorui from Su Xi Zhi Yan told reporters that the emphasis on disclosure of comprehensive financing costs aligns with previous provisions in the new credit assistance regulations regarding fee structures, and also enhances consumers’ right to know through financial marketing and publicity, safeguarding their legitimate rights.

“Looking at the actions of regulatory interviews with loan platform operators before ‘3.15’, whether in marketing, fee disclosure, or complaint mechanisms, all point to the focus on protecting financial consumers, indicating that consumer protection has become a top priority in personal lending business,” Su Xiaorui said. This also signals that consumer protection is not only the responsibility of licensed financial institutions but also a key obligation of lending platforms, which must comply with regulations and ensure consumer protection is integrated into all stages of the lending process.