Personal loans regulations update: New rules coming! Will take effect officially starting August 1st this year

Have you ever experienced signing a loan agreement only to see a 6% annual interest rate, but in reality, there are also guarantee fees, service fees, consulting fees, and more…

To address these irregular practices, the Financial Regulatory Administration and the People’s Bank of China announced new regulations on the 15th, requiring all personal loans to clearly disclose the comprehensive financing cost, so that consumers can understand clearly.

What is the comprehensive financing cost?

It is the total of all interest and various fees related to the loan, including but not limited to the interest paid by the borrower under normal circumstances, installment fees, credit enhancement service fees, and other financing costs, as well as all costs such as overdue penalty interest in case of default.

How to ensure implementation?

For on-site personal loan services, the borrower must sign and confirm the comprehensive financing cost disclosure form before signing the loan contract or proceeding with installments.

For online personal loan services, the comprehensive financing cost disclosure form must be displayed via a pop-up window, with a mandatory reading period, and the borrower must confirm before signing the loan contract or proceeding with installments.

In online consumption scenarios involving installment payments, the relevant information about the comprehensive financing cost must be clearly and prominently displayed on the payment page of the order.

The new regulation applies to all types of lending institutions, including banks, consumer finance companies, auto finance companies, trust companies, and small loan companies. Considering the time needed for system adjustments, the regulation will officially take effect from August 1 this year.

Source: CCTV News

Origin: Xiao Li Help