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

On March 15, the Financial Regulatory Administration announced on its official website that the China Banking and Insurance Regulatory Commission and the People’s Bank of China issued the “Regulations on Clear Disclosure of the Total Cost of Personal Loan Business” (hereinafter referred to as the “Regulations”) to promote the resolution of issues related to 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 the total financing cost based on the “new-old” delineation principle.

The comprehensive financing cost disclosure form should include the loan principal and all interest and fee items.

In recent years, China’s personal loan market has developed rapidly, playing a positive role in promoting personal consumption, business operations, and supporting the steady and healthy development of the national economy. At the same time, there have been frequent issues with interest and fee chaos, especially in internet lending. Industry insiders told the “Daily Economic News” that inadequate and non-standard disclosure of interest and fee information in personal loans, and insufficient protection of consumers’ right to know, are significant causes of these problems.

Against this backdrop, the Regulations refine the scope, operational methods, and procedures for interest and fee information disclosure within the existing regulatory framework for loan information disclosure. They require lenders to present a clear disclosure form of the total financing cost to borrowers. Notably, the “total 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 all interest and fee items charged by the lender and its partners, including their collection methods, standards, and entities, and then calculate the annualized total financing cost under normal repayment conditions. It should also list potential costs and their standards and entities in cases of default, such as late payments or misappropriation. The fee standards for normal repayment should be converted into annualized rates according to requirements like 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, the lender and its partners will not charge any other interest or fee related to the loan.

Additionally, the Regulations provide operational requirements for three major scenarios: on-site personal loan processing, online personal loan processing, and online consumer installment payments. For example, online personal loan applications should display the comprehensive financing cost disclosure form 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 the comprehensive financing cost disclosure, we have prepared sample disclosure forms and online installment payment pages demonstrating the comprehensive financing cost disclosure. We will also guide industry associations such as the China Banking Association, the China Internet Finance Association, and the Market Rate Pricing Self-Regulatory Mechanism to leverage industry self-discipline to support the implementation of these requirements.”

Experts: Better Protect Borrowers’ Right to Know and Choose

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, providing about five months for preparation. When implemented, new business activities must strictly adhere to the Regulations’ requirements for clear disclosure of the total financing cost, based on the “new-old” delineation principle.

Meanwhile, the Financial Regulatory Administration and the People’s Bank of China will further deepen the practice of serving the people through finance, strengthen regulatory coordination between central and local authorities, and guide the implementation of the Regulations to better protect the legitimate rights and interests of financial consumers, thereby supporting high-quality economic and social development.

Notably, at the China People’s Bank Work Conference held from January 5 to 6 this year, the promotion of clear disclosure of personal loan total financing costs was emphasized. Experts at that time highlighted that promoting such 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.

With the issuance of the Regulations, a concrete timetable for implementing the disclosure of personal loan total financing costs has been established. Senior researcher Su Xiaorui from Suxi Zhiyan told reporters that the emphasis on disclosing the total financing cost aligns with previous provisions in the new loan assistance regulations regarding fee structure, and also reinforces consumers’ right to know through financial marketing and publicity, ensuring the protection of their legitimate rights.

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

Daily Economic News