Over 200,000 Complaints Point to "Upfront Fees," New Personal Loan Regulations Will Eliminate Online Lending "Ambiguous" Charges

Have you ever experienced this: using financial products “without knowing,” only to find out afterward that multiple fees had been deducted?

On March 16, Caixin found on the Heimao Complaint Platform that there are 217,000 complaints with the keyword “head-cutting interest” (i.e., pre-deducting interest or fees from the principal at the time of disbursement), including 8,810 complaints with the keywords “unaware + head-cutting interest”; 145,000 complaints with the keyword “loan + service fee”; and 82,000 complaints with “loan + membership fee.”

In response to some institutions disguising true costs through various charges and indirectly inflating borrowing costs, regulators have introduced new policies for regulation. On March 15, the National Financial Regulatory Administration and the People’s Bank of China issued the “Regulations on Clear Disclosure of Personal Loan Comprehensive Financing Costs” (referred to as the “New Regulations”), which specify that eight types of lending institutions must clearly disclose the comprehensive financing costs in three major scenarios, eliminating “hidden charges.” The New Regulations will take effect on August 1, 2026.

In fact, regulatory enforcement has been ongoing. Over the past month, regulators have held two meetings with a total of 11 platforms, focusing mainly on the promotion language and information disclosure standards of lending services. A report by Zero One Think Tank pointed out four typical violations that artificially increase overall borrowing costs: forced bundling of charges, hidden service fees, disguised borrowing fees through scenarios like device rentals or installment malls, and covert charges through membership benefits.

Economist and new financial expert Yu Fenghui told Caixin that personal loan regulation policies are moving toward greater transparency, standardization, and enhanced consumer rights protection. In the long run, these policies will help purify the market environment, promote healthy development of the financial services industry, and increase public trust in the financial system.

Mandatory Disclosure of Loan Interest and Fees

On March 15, the National Financial Regulatory Administration and the People’s Bank of China jointly issued the “Regulations on Clear Disclosure of Personal Loan Business Comprehensive Financing Costs,” requiring eight types of financial institutions—including commercial banks, rural cooperative banks, rural credit cooperatives, auto finance companies, consumer finance companies, corporate group finance companies, trust companies, and microloan companies—to display a clear comprehensive financing cost statement to borrowers in three major scenarios: on-site personal loan processing, online personal loan processing, and installment payments in online consumption scenarios. These regulations will be implemented from August 1, 2026.

The comprehensive financing cost refers to all interest and related fees borne by the borrower, including but not limited to loan interest, installment fees, credit enhancement service fees, and potential costs such as late payment penalties.

Specifically, for on-site personal loan processing, borrowers must sign and confirm the comprehensive financing cost statement before signing the loan agreement or initiating installment payments.

For online personal loan processing, the comprehensive financing cost statement must be displayed via pop-up windows, with mandatory reading time, and confirmed by the borrower before signing the loan agreement or starting installments.

In online consumption scenarios involving installment payments, the loan principal, installment plan, service fees, the entity charging them, the annualized comprehensive financing cost under normal conditions, and potential costs and standards in case of default must be clearly displayed prominently on the payment page. It should also be explicitly stated that no other interest or fees will be charged beyond those disclosed.

Meetings with 11 Lending Platforms

It is noteworthy that regulators also provided guidance to platform operators. On March 13, the National Financial Regulatory Administration disclosed that it had held meetings with five platforms—Fenqile, Qifu Borrow, Niwo Dai, Yixianghua, and Credit Fei—regarding issues in internet lending.

The meetings required platform operators to strictly regulate marketing practices, clearly disclose loan product interest and fee information, comply with personal information protection laws, conduct lawful collection activities, improve customer complaint mechanisms, and effectively protect consumers’ legal rights.

Earlier, on February 13, the regulator announced meetings with six travel platforms—Ctrip (TCOM.US), Amap, Tongcheng Travel (00780.HK), Fliggy, Hanglv Zongheng, and Qunar Travel—regarding issues in their cooperation with financial institutions. They were asked to standardize marketing, avoid misleading language, clearly disclose lender and loan product information, and remind borrowers to borrow responsibly. They were also instructed to facilitate complaint channels, respond promptly, resolve disputes properly, improve service quality, and safeguard consumer rights.

Accelerating Standardization of Lending Business

According to Zero One Think Tank, four typical violations that artificially inflate “overall borrowing costs” include: forced bundling of charges, hidden service fees, disguised borrowing fees through scenarios like device rentals or installment malls, and covert charges via membership benefits.

1. Forced bundling: Lenders require consumers to buy memberships, credit enhancement, or debt management products as a condition for loan approval, with related costs not disclosed as part of the comprehensive financing cost.

2. Hidden service fees: Fees such as fund management, consulting, or processing fees are charged before or during repayment without sufficient disclosure, often deducted upfront, resulting in the borrower receiving less than the loan amount.

3. Disguised borrowing charges: Some platforms conduct “rent-to-buy” or “installment shopping” under the guise of leasing or consumer spending, charging high rent or installment fees that significantly increase the effective annualized rate, with costs and rate conversion standards not clearly disclosed.

4. Covert membership charges: Consumers are required to recharge memberships or purchase benefits to enjoy lower interest rates or higher credit limits, with membership fees non-refundable and the link between membership benefits and loan rates not clearly explained.

Yu Fenghui emphasized that personal loan regulation policies are evolving toward greater transparency, standardization, and stronger protection of consumer rights. The new regulations and targeted meetings demonstrate the regulators’ commitment to creating a fair competitive environment and safeguarding consumers’ right to information and choice.

She believes that the implementation of these policies will significantly improve industry compliance, allowing consumers to better understand the costs involved in borrowing and make more informed decisions. In the long term, these measures will help purify the market, promote healthy industry development, and strengthen public trust in the financial system.