Consumer Loan Interest and Fee Transparency: Lending Institutions Deploy Intensive Business Adjustments to Eliminate "Opaque Accounting"

◎ Reporter Huang Kun

Recently, Shanghai Securities News learned from industry insiders that after the State Administration of Financial Supervision and the People’s Bank of China jointly issued the “Regulations on Clear Disclosure of Personal Loan Business and Comprehensive Financing Costs” (hereinafter referred to as the “Regulations”), various loan institutions have been actively adjusting their operations to address issues of unclear and complicated interest and fee disclosures.

According to the Regulations, the comprehensive financing cost must be “clearly disclosed on one table,” consolidating costs from interest, service fees, installment fees, and other charges into a single statement. This not only clarifies the confusing fee structures but also promotes fair market competition. Industry experts generally believe that borrowers will no longer be “looking at a foggy picture,” and competition in the personal loan market will shift from broad customer acquisition to transparent pricing and improved service efficiency.

Promoting Transparency in Interest and Fees

Cases such as two contracts for one loan, actual costs far exceeding advertised rates, hidden charges, and even malicious deductions are common in lending processes, reflecting the widespread issue of unclear interest and fee calculations.

A review of complaints on the Black Cat Complaint Platform shows that there are 4,356 complaints related to “personal loans,” with 3,628 concerning “assistive lending” services, among which “unclear interest and fees” are the main issues.

Now, these irregularities are under strict regulation. Starting August 1, 2026, all personal loan interest and fees will be disclosed through a “single clear statement.” The regulations explicitly require lenders to present a comprehensive financing cost disclosure form, indicating the principal amount and itemizing each interest and fee charged by the lender and partner institutions, including the method of collection, standards, and responsible parties.

According to industry sources, financial institutions and third-party assistive lending platforms are rapidly advancing transparency in interest and fee disclosures. “Past product displays, contract texts, and business processes all need adjustments,” said a staff member from a city commercial bank. The bank must not only strengthen consumer education to help understand the ‘annualized comprehensive financing cost’ but also optimize online prompts, such as prominent pop-up windows and mandatory reading durations.

A senior executive from a leading consumer finance company told Shanghai Securities News that the regulations have a direct impact on consumer finance companies, requiring strengthened mechanisms for informed consent and mandatory reading times during compliance processes. “If the interest and fee levels are high, systemic adjustments are also needed in marketing strategies and risk control models.”

A business representative from an assistive lending platform explained that previously, borrowers had to sign multiple contracts with fund providers and assistive platforms to obtain a loan. Some borrowers miscalculated or institutions exploited information gaps to inflate actual borrowing costs, turning interest and fees into a “confusing mess.” “In the future, with a unified comprehensive financing cost disclosure form, borrowers can understand the true costs without dissecting each contract, which will curb irregular practices and significantly reduce complaints and disputes,” he said.

Coverage of Online and Offline Scenarios

The regulations specify detailed operational requirements for different lending scenarios, including on-site processing, online processing, and online installment payments, to ensure effective implementation of the comprehensive financing cost disclosure.

In particular, the rules for online consumer installment payments are more stringent. Institutions must clearly display the loan principal, installment plan, service fees, responsible parties, the annualized comprehensive financing cost under normal performance, and potential costs and standards in case of default on the payment page.

Lujin Fei, Senior Deputy Director of the Financial Business Department at Orient Securities, told Shanghai Securities News that these requirements help reduce arbitrage opportunities and promote fair competition. Moreover, they effectively address information asymmetry across different scenarios, helping consumers lower their financing burdens.

Under the backdrop of strict regulation, the competitive logic of the loan market is changing. Lujin Fei believes that as disclosure costs rise and compliance requirements tighten, profit margins will be squeezed, making high-interest, high-fee models unsustainable. Inferior institutions will gradually exit the market. Future competition will shift from broad customer acquisition to service efficiency and real interest rate levels.

(Edited by: Qian Xiaorui)

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