Starting today, new regulations for personal loans are officially in effect, bringing significant changes to how lenders disclose costs. According to announcements from the six major state-owned banks—Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Postal Savings Bank of China, and Bank of Communications—these institutions have published upper limits for the comprehensive financing costs of personal loans under normal repayment conditions.
These disclosures are based on the Regulations on Explicit Disclosure of Comprehensive Financing Costs for Personal Loan Businesses (Financial Regulation [2026] No. 2). All six banks stated that they will implement differentiated pricing for their personal loans. Under normal repayment scenarios, all interest and fee items for personal loan comprehensive financing costs must be converted to an annualized level according to the People's Bank of China's rules, with the total not exceeding the national prescribed cap.
For the upper limit of the annualized interest rate on new personal loans, four banks—Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank—share the same rate levels: personal consumption loans (excluding credit card loans) have an annualized interest rate cap of 6%; personal business loans have a cap of 6%; for personal housing mortgage loans, the cap for terms of five years or less is 1-year LPR + 0.5%, and for terms over five years, it is 5-year above LPR + 0.5%.
Postal Savings Bank of China and Bank of Communications have clarified: personal consumption loans (excluding credit card loans) have an annualized interest rate cap of 12%; personal business loans have a cap of 12%; for personal housing mortgage loans, the cap for terms of five years or less is 1-year LPR + 0.5%, and for terms over five years, it is 5-year above LPR + 0.5%.
It is important to note that all six banks have emphasized in their announcements that these are only upper limits. The actual loan interest rate for a specific loan will be based on the loan contract signed between the lending branch and the customer.
Why is "clear pricing" for personal loan fees necessary?
China's personal loan market has grown rapidly in recent years, playing a positive role in boosting personal consumption, production, and business operations, as well as supporting the steady and healthy development of the national economy. However, the disclosure of fee information in personal loan business has also faced certain issues. These problems can easily lead to financial consumption disputes, weaken the effectiveness of interest rate policies, and reduce the quality and efficiency of financial services in supporting the real economy. Therefore, it is necessary to formulate and implement relevant regulatory regulations, detailing the scope, operational methods, and procedures for fee information disclosure in personal loan business. This helps clarify the responsibilities of all parties, better protect the legitimate rights and interests of financial consumers, smooth the transmission of financial policies benefiting the people, and promote the standardized and healthy development of the industry.
What does the comprehensive financing cost include?
This regulation brings all costs related to personal loans into the comprehensive financing cost. This includes, but is not limited to, loan interest, installment fees, credit enhancement service fees, and other financing costs paid by the borrower under normal repayment conditions, as well as contingent costs like overdue penalties for defaults. Additionally, the regulation requires lenders to strengthen the management of cooperative institutions involved in marketing, customer acquisition, guarantee, and credit enhancement. Lenders must promptly understand how these partners are implementing the requirement for explicit disclosure of comprehensive financing costs, take corrective measures against any violations of rules or contracts by cooperative institutions, and if the situation is serious, take measures such as terminating the partnership.
What should borrowers pay attention to when applying for a personal loan?
For in-person branch applications, borrowers must sign a written confirmation on the comprehensive financing cost disclosure form before signing the loan contract or handling the installment. For online applications, lenders must display the comprehensive financing cost disclosure form via a pop-up window, set a mandatory reading time, and require the borrower to confirm before signing the loan contract or handling the installment. For installment payments in online consumption scenarios, the relevant comprehensive financing cost information must be clearly displayed in a prominent manner on the consumer order payment page. Furthermore, if financing costs change due to adjustments in the interest rate pricing benchmark or promotional activities, the lender must promptly inform the borrower.