A new self-regulatory framework has been introduced to standardize how personal loan costs are presented to borrowers.
On September 18th, financial industry sources reported that, in order to implement the requirements of the "Provisions on Transparent Disclosure of Comprehensive Financing Costs for Personal Loan Business" (Jin Gui [2026] No. 2), issued by the National Financial Regulatory Administration and the People's Bank of China, several industry associations have jointly developed a new set of operational guidelines. These guidelines, known as the "Self-Regulatory Code for Transparent Disclosure of Comprehensive Financing Costs in Personal Loan Business," were formulated under the direction of financial regulatory authorities by the China Internet Finance Association, the China Banking Association, the China Trust Industry Association, the China Finance Company Association, and the China Micro-credit Industry Association.
The primary objective of this Code is to encourage financial institutions to enhance their awareness and strictly implement the new standards. It aims to comprehensively regulate the collection of interest and fees and the disclosure of information in personal lending, promoting greater transparency in personal loan pricing. This initiative is designed to support the high-quality development of the financial sector by making the cost structure of personal loans clearer and more accessible to consumers.
Under the new Code, when disclosing comprehensive financing costs for personal loan products, lenders must calculate the annualized cost by referencing the internal rate of return method as outlined in the People's Bank of China Announcement ([2021] No. 3). This calculation should convert all interest and fees borne by a borrower under normal repayment conditions into an annualized percentage rate. Crucially, the Code prohibits the use of alternative formats such as "daily interest rates" or "monthly fee rates" when presenting this comprehensive cost to borrowers.
Furthermore, the Code stipulates specific requirements for online lending platforms. When a borrower applies for a personal loan online, the lender must display a standardized comprehensive financing cost disclosure form through a separate pop-up window. To ensure borrowers have adequate time to understand the cost information, this pop-up must include a mandatory reading period of no less than 10 seconds. This requirement is designed to ensure that borrowers are fully informed of the true cost of their loans before proceeding.