Personal Loan Interest and Fees Bid Farewell to "Confusing Accounts"! Some Banks Have Responded Quickly, Small and Medium Loan-Assistance Platforms Face Squeeze

“Daily interest of 0.03%, funds arrive in three minutes” “Low interest, instant approval of credit limits,” various personal loan advertisements flood mobile apps and social platforms. Behind the seemingly convenient and attractive offers, there are hidden traps of hidden fees. Recently, the State Administration of Financial Supervision and the People’s Bank of China jointly issued the “Regulations on Clear Disclosure of the Total Cost of Personal Loan Business” (hereinafter referred to as the “Regulations”), targeting the issue of non-standard disclosure of interest and fees. The Regulations clearly require lenders to provide borrowers with a “Clear Disclosure of Total Cost Form,” listing all interest and fee items, charging standards, and entities involved, implementing a “one-page clear” public disclosure, and officially taking effect on August 1 under the “new-old” cutoff principle. The new rules will impact the structure of banks and the loan assistance industry. On March 18, Beijing Business Daily learned from multiple bank officials that some banks have responded quickly, conducting policy discussions and business reviews. One bank official stated that after full disclosure of the total financing cost, the cooperation model between banks and loan assistance agencies will be reshaped, requiring accelerated cleanup or rectification of high-cost, low-compliance partner institutions, and promoting a shift towards “low cost, strong compliance, light channels.”

Bank officials: Accelerate research on better implementation

For a long time, the disclosure of interest and fee information in personal loans has generally involved “low front-end interest rates, with additional credit enhancement service fees and other charges layered on the back end.” When users apply for loans on third-party platforms, they often only see the bank’s interest rate, ignoring the platform and credit enhancement costs, leading to actual annualized rates significantly higher than the displayed rate, causing numerous complaints and disputes.

In this context, on March 15, the Regulations were officially released, clarifying that lenders should provide borrowers with a clear “Total Cost Disclosure Form,” itemizing all interest and fee items, collection methods, and standards charged by the lender and its partners. The Regulations also stipulate, under the “new-old” cutoff principle, that the policy will be implemented from August 1, giving institutions ample time to prepare.

Beijing Business Daily learned that after the release of the Regulations, many banks have completed policy review and initial discussions. “The head office is likely to issue relevant standards soon, mainly focusing on optimizing business processes and improving agreement texts, clarifying specific disclosure requirements,” said a staff member from a joint-stock bank’s business department. Regarding the full disclosure of total financing costs required by the Regulations, “banks will probably promote from two directions: either clearly informing customers of the total financing cost in loan notices and related materials, or creating a comprehensive cost confirmation letter, integrating it into the loan agreement. Which approach is more efficient and practical still needs further discussion.”

In personal loan business, the model of showing low interest rates upfront and layering various fees later is closely related to the cooperation model between banks and loan platforms. Banks, as fund providers, cooperate with third-party loan platforms that handle customer acquisition and risk enhancement. To cover potential default costs, these platforms charge credit enhancement fees and other related charges, which are noted in the loan contracts but often go unnoticed due to lengthy online contracts and quick customer confirmations.

An example given by a staff member from a joint-stock bank: the advertised 4% interest rate on consumer loans only covers the bank’s interest. Guarantee fees charged by guarantee agencies and service fees by loan platforms are not included in the bank’s disclosure. After the Regulations take effect, this situation will change. If borrowers pay additional costs beyond the bank’s interest, these fees must be fully disclosed. For example, if all fees sum up to a total cost of 5%, then customers should not bear any hidden costs beyond this 5% rate, truly achieving transparency in interest and fees.

A private bank official mentioned that from a business perspective, routine compliance actions like signing and information disclosure are generally in line with regulatory requirements. However, some details need further discussion, such as which interface and in what form all fees should be disclosed online; how to divide disclosure responsibilities between self-operated loans and third-party platform loans; and how to standardize the annualized conversion of different fee types.

Gao Zhengyang, a special researcher at SuShang Bank, believes that the Regulations clearly include all financing costs into a unified calculation scope, promoting more transparent pricing mechanisms. Banks can optimize pricing models by strengthening differentiated pricing based on customer credit tiers, embedding risk premiums into the interest rate system, and reducing reliance on external fees. Continuous operational efficiency improvements through refined management can offset revenue pressures. The core of this adjustment is to shift bank pricing logic from fee-driven to risk and efficiency-driven.

Small and medium loan platforms face squeezed survival space

During interviews, many bank officials stated that the Regulations have relatively little impact on banks themselves, as licensed financial institutions already have comprehensive compliance systems. The regulations mainly optimize and standardize existing interest and fee disclosure processes. However, for small and medium-sized banks and loan platforms that rely heavily on loan assistance, there will be some impact, pushing loan assistance towards compliance and professionalism.

The Regulations emphasize that the total cost disclosure form and online installment payment pages must clearly indicate costs. Besides the explicitly disclosed costs, lenders and their partners cannot charge any other interest or fees related to the loan. Coupled with the State Administration of Financial Supervision’s previous notice on strengthening the management of internet loan assistance business, banks have gradually shrunk their loan assistance cooperation scope, implementing a list-based management of partner institutions and prioritizing cooperation with leading platforms.

A bank official told Beijing Business Daily, “After the release of the ‘Loan Assistance New Regulations,’ banks have reviewed existing partnerships, eliminated some small and medium loan platforms, and tightened cooperation thresholds, focusing resources on top-tier platforms.” The Regulations’ requirement for full disclosure of total financing costs will significantly weaken the competitiveness of small and medium loan platforms, further squeezing their survival space.

From an industry perspective, small and medium loan platforms are already at a disadvantage. The Regulations exacerbate this situation. “Small and medium platforms have less traffic, weaker risk control, and poorer client qualification. To cover higher bad debt risks, their total financing costs are already higher than top-tier platforms. Once all fees are fully disclosed, consumers will compare total costs directly and prefer lower-cost options, leading to customer loss, profit difficulties, and operational challenges,” said a bank official. Conversely, top-tier platforms, with large traffic, mature risk control, and lower operational costs, are expected to further expand market share, increasing industry concentration.

Gao Zhengyang sees that industry development trends suggest that the concentration of top players in loan assistance will continue to rise. Institutions with strong compliance and technological capabilities may gain more bank cooperation opportunities. The cooperation model may shift toward less channel dependence, emphasizing data sharing and risk control collaboration.

Control over full-chain pricing rights is essential

The new regulations not only reshape industry structure but also pose new challenges to banks’ business models, pushing them to reconstruct revenue and cooperation strategies.

A staff member from a joint-stock bank said that after the Regulations are implemented, banks will face two main challenges: first, the need to lower actual rates for some third-party-dependent businesses under the total cost scope, requiring re-evaluation of profits and pricing models; second, restructuring cooperation models, accelerating cleanup or reduction of high-cost, low-compliance partner institutions, and promoting a shift toward “low cost, strong compliance, light channels,” ensuring customer acquisition efficiency while strictly adhering to compliance.

SuXizhi Research Senior Analyst Su Xiaorui pointed out that the requirement to include all loan-related fees into a “yearly comprehensive financing cost” and obtain borrower signatures means the “profit from lending” model for licensed financial institutions will be fundamentally changed. Under the “one-page clear” mechanism, fees not listed in the form cannot be charged. This indicates that licensed financial institutions, as lenders, must take full responsibility for managing the entire loan chain, clarifying which institutions charge what fees to borrowers, and driving a reconstruction of cooperation and pricing models.

Su Xiaorui further stated that future licensed institutions will manage the entire process with partner institutions and should enhance independent customer acquisition and risk control capabilities, gradually reducing reliance on external agencies. Loan assistance institutions may be positioned as specialized service providers for certain technologies, scenarios, or traffic, adopting lightweight cooperation. After strengthening their own business capabilities, licensed institutions are expected to gain full control over the entire loan chain’s pricing and management, promoting healthy and sustainable industry development.

Looking at industry trends, strengthening independent capabilities and core pricing rights will be the inevitable future direction for banks. “Banks can establish tiered access and dynamic evaluation mechanisms, continuously assess partner pricing transparency, compliance, and risk control, and clarify fee boundaries and disclosure responsibilities through cooperation agreements. This reduces dependence on single channels, enhances self-customer acquisition, and lowers reliance on high-cost traffic platforms,” Gao Zhengyang said.

Beijing Business Daily Reporter: Song Yitong

(Edited by: Qian Xiaorui)

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