TITLE: China's Financial Regulator and Central Bank Issue Personal Loan Comprehensive Financing Cost Disclosure Rules
BODY:
On March 15, 2026, the National Financial Supervision and Administration (NFSA) and the People's Bank of China (PBOC) jointly issued the Regulation on Disclosure of Comprehensive Financing Costs in Personal Loan Business (the Regulation).
The Regulation addresses inconsistencies and lack of transparency in interest and fee disclosures within China's personal loan market. The NFSA and PBOC determined that standardised disclosure requirements are necessary to protect financial consumers, improve the transmission of monetary policy, and promote healthy industry development.
The Regulation defines comprehensive financing costs as encompassing all costs associated with personal loans, including interest, instalment fees, credit enhancement service fees, and contingent costs such as overdue penalties in cases of default. Lenders must disclose these costs through a standardised comprehensive financing cost disclosure form.
For in-person transactions, borrowers must sign the disclosure form before contract execution or instalment arrangement. For online transactions, lenders must display the disclosure form in a pop-up window with mandatory reading time. For online consumer instalment transactions, lenders must prominently display comprehensive financing costs on the payment page.
The disclosure form must itemise all fees by collection method, standard, and collecting entity, calculate the annualised comprehensive financing cost using the internal rate of return method, and disclose contingent costs for default scenarios. Lenders must confirm that no additional loan-related fees will be charged beyond those disclosed.
The Regulation requires lenders to manage third-party partners through cooperation agreements that clearly allocate responsibility for compliance. Lenders must monitor partner compliance and take corrective measures for violations, including termination where appropriate.
The Regulation takes effect on August 1, 2026, allowing lenders time to adjust processes and systems. New business must comply immediately upon implementation under a "new-old demarcation" principle.