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

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◎ 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 Total Financing Costs” (hereinafter referred to as “Regulations”), various loan institutions are rapidly adjusting their operations to address issues of unclear and complicated interest and fee calculations.

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

Promoting Sunshine in Interest and Fees

A single loan often involves two contracts, with actual costs far exceeding advertised rates, hidden charges, or even malicious deductions… Such “unclear interest and fee calculations” are common during lending processes.

The reporter found that on the Black Cat Complaint platform, there are 4,356 complaints related to “personal loans” and 3,628 complaints about “assist loans,” with “unclear interest and fees” being the main issue.

Now, these irregularities are under strict regulation. Starting August 1, 2026, all personal loan interest and fees will be disclosed on a single table. The regulations clearly 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.

The reporter learned that financial institutions and third-party assist loan platforms are quickly promoting the sunshine disclosure of interest and fees. “Past product displays, contract texts, and business processes all need adjustments,” said a person 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 times.

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

A business representative from an assist loan platform told the Shanghai Securities News that previously, borrowers had to sign multiple contracts with fund providers and assist loan platforms to get 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, through a unified comprehensive financing cost disclosure form, borrowers won’t need to dissect contracts to understand the true costs. This can curb irregular practices and significantly reduce complaints and disputes,” he said.

Full Coverage of Online and Offline Scenarios

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

Among them, the rules for online consumer installment payments are more stringent. Institutions must clearly display the loan principal, installment arrangements, 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 the Shanghai Securities News that these requirements help reduce “arbitrage space” 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 logic of competition in the loan market is changing. According to Lujin Fei, as disclosure costs rise and compliance requirements tighten, profit margins are squeezed, making high-interest, high-fee models unsustainable. Poor-quality institutions will gradually exit the market. Future competition will shift from broad customer acquisition to service efficiency and real interest rates.