National Financial Supervision and Administration Administration and People's Bank of China Release "Regulations on Explicit Disclosure of Comprehensive Financing Costs for Personal Loan Business"

On March 15, the official website of the China Banking and Insurance Regulatory Commission announced that in order to maintain the order of the personal loan market, protect the legitimate rights and interests of financial consumers, and improve the quality and efficiency of financial services, the Financial Supervision and Administration Bureau of China, together with the People’s Bank of China, jointly issued the “Regulations on the Disclosure of the Total Financing Cost of Personal Loan Business” (hereinafter referred to as the “Regulations”), which will take effect on August 1, 2026.

Revealing the total financing cost of personal loan business is an important measure for the Financial Supervision and Administration Bureau and the People’s Bank of China to thoroughly implement the decisions and deployments of the Party Central Committee and the State Council, to deeply understand the political and people-oriented nature of financial work, and to coordinate efforts to prevent risks, strengthen regulation, and promote high-quality development. It is also a powerful tool to strengthen the coordination between financial regulation and monetary policy, and to improve the quality and effectiveness of financial services to the real economy. The Regulations aim to address issues of non-standard, non-transparent disclosure of interest and fee information in personal loan business, better safeguard the legitimate rights and interests of financial consumers, facilitate the smooth transmission of financial policies benefiting the people, and promote the healthy and regulated development of the industry.

The Regulations consist of 11 articles. Within the existing framework of loan information disclosure regulation, they specify the scope, operational methods, and procedures for disclosing interest and fee information in personal loan business, requiring lenders to present a clear disclosure form of the total financing cost, transparently disclose the interest and fee costs of personal loans, and effectively implement the disclosure requirements for interest and fee information in personal loan business.

Next, the Financial Supervision and Administration Bureau and the People’s Bank of China will deepen the practice of the “financial serving the people” concept, strengthen coordination between central and local regulators, guide the implementation of the Regulations, better protect the legitimate rights and interests of financial consumers, and provide strong support for promoting high-quality economic and social development.

Regulations on the Disclosure of the Total Financing Cost of Personal Loan Business

1. The “total financing cost” of personal loan business referred to in these Regulations means all interest and fee costs borne by the borrower related to the loan, including but not limited to loan interest, installment fees, credit enhancement service fees, normal performance costs, as well as potential costs under default circumstances such as overdue penalty interest. Lenders shall determine the annualized level of the total financing cost reasonably and in accordance with laws and regulations.

2. When conducting personal loan business, lenders shall display a clear disclosure form of the total financing cost to the borrower. The disclosure form shall specify the principal amount of the loan, itemize all interest and fee items charged by the lender and its partners, including their collection methods, standards, and entities, and calculate the annualized total financing cost under normal performance conditions. It shall also list potential costs and their standards and entities under default or misappropriation scenarios. The interest and fee standards under normal performance shall be converted into annualized levels according to requirements such as the “Announcement of the People’s Bank of China” ([2021] No. 3). The disclosure form shall also clearly state that, apart from the costs already disclosed, the lender and its partners will not charge any other interest or fee related to the loan.

3. Lenders shall clearly disclose the maximum limit of the personal loan’s total financing cost under normal performance at their business premises, official websites, and other channels. For on-site personal loan transactions, borrowers shall sign and confirm the disclosure form of the total financing cost before signing the loan contract or proceeding with installment payments. For online transactions, the disclosure form shall be displayed via a pop-up window with a mandatory reading period, which the borrower must confirm before signing the loan agreement or proceeding with installments.

In online installment payment scenarios, the payment page shall prominently display the principal, installment plan, service fees, collection entities, annualized total financing cost under normal performance, and potential costs and standards under default scenarios. It shall also clearly state that no other interest or fee will be charged beyond those already disclosed.

4. If the relevant financing costs change due to adjustments in interest rate benchmarks or promotional activities, lenders shall notify the borrower in a timely manner.

5. When signing cooperation agreements with partner institutions, lenders shall specify the responsibilities and obligations of each party regarding the implementation of the disclosure requirements. Lenders shall strengthen management of partner institutions, promptly take corrective actions against violations or breaches, and, in serious cases, terminate cooperation, pursue legal recovery of losses, and hold legal liabilities.

6. Industry associations shall cooperate with financial regulatory authorities to promote industry self-discipline, guide and urge industry institutions to implement the disclosure requirements for the total financing cost of personal loan business, and jointly create a fair and transparent market environment.

7. Borrowers shall reasonably assess their income levels and debt capacity when applying for personal loans, avoid excessive borrowing, and choose formal channels for borrowing. Borrowers should pay attention to the total financing cost, fully understand the cost items, collection methods, standards, annualized levels, collection entities, and default responsibilities.

8. The Financial Supervision and Administration Bureau, its dispatched agencies, the People’s Bank of China, its branches, and local financial management agencies shall strengthen supervision and management, urge lenders to implement the disclosure of the total financing cost, and hold accountable those who fail to comply, lose control of partner institutions, or cause significant risks due to cooperation. They shall also work with relevant departments to crack down on illegal intermediary activities in the lending sector.

9. The term “lender” in these Regulations refers to commercial banks, rural cooperative banks, rural credit cooperatives, auto finance companies, consumer finance companies, corporate group finance companies, trust companies, microloan companies, and other financial institutions and local financial organizations. “Partner institutions” refer to third-party organizations that cooperate with lenders in marketing, customer acquisition, guarantees, and credit enhancement.

10. “Personal loan” refers to loans issued by lenders to qualified natural persons for personal consumption, production, and business purposes, in accordance with the “Personal Loan Management Measures” (Order No. 3 of the State Financial Supervision and Administration Bureau).

11. These Regulations shall come into force on August 1, 2026.

(China Banking and Insurance Regulatory Commission)

(Edited by: Qian Xiaorui)

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