Loan Facilitation Industry's Transformation Toward Transparency Accelerates; What Impact Will New Clear-Pricing Regulations for Personal Loans Bring?

This article is reprinted from: CCTV.com

CCTV.com News: Open your mobile app, and loan advertisements are everywhere. Many people are lured into borrowing by the so-called “low interest” gimmick, ultimately falling into a debt trap. On March 15, the National Financial Regulatory Administration and the People’s Bank of China officially released the “Regulations on Clear Disclosure of Total Cost of Personal Loan Business.” What impacts will the new regulations bring? Let’s see the reporter’s coverage.

Information asymmetry makes actual costs higher than advertised interest rates

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

Industry estimates and regulatory surveys show that such opaque charges can make the actual annualized cost 5–10 percentage points higher than the advertised rate. Many people only realize they are not taking out a “low-interest loan” but a “high-interest loan” after overdue penalties and interest pile up.

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

Using “mandatory transparency” to break information barriers and define regulatory boundaries

On March 15, the National Financial Regulatory Administration and the People’s Bank of China announced the “Regulations on Clear Disclosure of Total Cost of Personal Loan Business,” which will take effect on August 1, 2026. According to the “new-old” cutoff principle, new business must strictly follow the requirements of the Regulations for clear disclosure of total financing costs.

Zeng Gang, chief expert at the Shanghai Financial and Development Laboratory, analyzed that the document clearly stipulates that all fee items, including the payers, collection methods, and standards, must be itemized. Based on this, the total financing cost should be converted into an annualized figure and publicly disclosed on business premises, official websites, and other channels. This requirement has significant protective meaning for ordinary consumers. It also mandates that lenders truthfully explain key information such as default responsibilities, penalty interest rules, and expected consequences, allowing borrowers to make rational decisions with full knowledge.

Addressing stubborn issues in the lending industry and protecting financial consumers’ rights

Offline loans must sign a “Total Cost Disclosure Form” and confirm with a signature; online loans display the disclosure form via pop-up windows, with mandatory reading time, and borrowers must confirm understanding of the cost details before proceeding; in consumer installment scenarios, the payment page should clearly and prominently disclose installment fees, default costs, and other relevant information.

Lou Feipeng, researcher at China Postal Savings Bank, stated that for individuals, after the official implementation of this policy, whether applying for loans online or offline, they need to carefully read the disclosure form before signing the loan agreement. After fully understanding the interest rates, related fee standards, and payers, they can apply for loans more transparently and better protect their legal rights and interests.