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 rate of 0.033%, funds credited within 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, hidden fees and “traps” lurk. 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, explicitly requiring lenders to provide borrowers with a “Clear Disclosure of Total Financing Cost Table,” listing all interest and fee items, standards, and entities involved, implementing a “one-table clear” public display, and officially enforcing it from August 1 under the “new-old” cutoff principle. The new regulation impacts 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 insider 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, promoting a shift toward “low-cost, compliant, lightweight 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 trust service fees and other charges.” When users apply for loans on third-party platforms, they often only see the bank’s interest rate, ignoring the platform and trust-related 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 Financing Cost Disclosure Table,” itemizing all interest and fee items, collection methods, and standards charged by the lender and its partners. The regulations, following the “new-old” cutoff principle, will be enforced 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 reviews 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 person from a joint-stock bank’s business department. Regarding the disclosure of the total financing cost 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 confirmation letter for the total financing cost, 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 adding 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, which are responsible for customer acquisition and risk trust enhancement. To cover potential default costs, they charge trust service fees and related charges from borrowers. Although these fees are noted in the loan contract, due to lengthy online contracts and quick signing by consumers, they are often not fully understood.

A representative from a joint-stock bank cited an example: the 4% interest rate publicly disclosed by the bank is only the interest charged by the bank itself. Guarantee fees charged by guarantee agencies and service fees by loan platforms are not included in the bank’s agreement disclosures. After the “Regulations” are implemented, this situation will change. If borrowers pay additional costs beyond the bank’s interest, these costs 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% interest 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 hedge against 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. These regulations mainly optimize and standardize existing interest and fee disclosure processes. However, for small and medium-sized banks and loan platforms heavily reliant on loan assistance, there will be some impact, pushing loan assistance toward compliance and professionalism.

The “Regulations” emphasize that the total financing cost disclosure table and online installment payment pages must clearly indicate costs. Besides the explicitly disclosed items, neither the lender nor its partners can charge any other interest or fees related to the loan. Coupled with the State Financial Supervision and Administration’s previous notice on strengthening the management of internet loan assistance business and improving financial service quality, banks have gradually shrunk their loan assistance cooperation scope, implementing a list-based management of partner institutions, prioritizing cooperation with leading platforms.

A bank official told Beijing Business Daily, “Since the release of the ‘Loan Assistance New Regulations,’ banks have reviewed existing partnerships, eliminated some small and medium loan platforms, and gradually tightened cooperation, raising thresholds and focusing resources on top-tier platforms.” After full disclosure of total financing costs, the competitiveness of small and medium loan platforms cooperating with banks will decline sharply, 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 insider. 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 believes 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 in loans 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 models.

A person from a joint-stock bank said that after the “Regulations” take effect, banks will face two main challenges: first, under the scope of total costs, some business relying on third-party cooperation will need to lower actual rates, requiring re-evaluation of profits and pricing models; second, cooperation models need to be restructured, accelerating the cleanup or reduction of partnerships with high-cost, low-compliance loan and guarantee agencies, promoting a shift toward “low-cost, compliant, lightweight channels,” ensuring customer acquisition efficiency while strictly adhering to compliance.

SuXizhi Research Senior Researcher Su Xiaorui stated that the requirement to include all loan-related fees in the “annualized comprehensive financing cost” and the addition of borrower signature confirmation means that the “profit from lending” model for licensed financial institutions will be fundamentally changed. Under the “one-table clear” mechanism, fees not listed in the table cannot be charged, indicating that licensed financial institutions, as lenders, must assume full management responsibility for the entire loan chain, clarifying which institutions charge what fees to borrowers, and thus driving a reconstruction of cooperation and pricing models.

Su Xiaorui further pointed out that in the future, licensed institutions will implement full-process management of 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 specific technologies, scenarios, or traffic, adopting lightweight cooperation. After strengthening their business capabilities, licensed institutions are expected to truly control the full-chain pricing and management rights, promoting healthy and sustainable development of the loan industry.

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 records, and risk control capabilities, and clarify fee boundaries and disclosure responsibilities through cooperation agreements. This can reduce dependence on single channels, continuously enhance self-customer acquisition, and lower reliance on high-cost traffic platforms,” Gao Zhengyang said.

Beijing Business Daily Reporter: Song Yitong

(Edited by: Qian Xiaorui)

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