On August 1, the “Provisions on Clarifying Comprehensive Financing Costs for Personal Loan Businesses” jointly issued by the China General Administration of Financial Supervision and Administration and the People's Bank of China officially came into effect. Personal loan interest rates changed from vague to open and transparent, and borrowers finally had a “clear account.” This move directly points to the persistent industry problems that have existed in the credit market for a long time. For some time now, the problems of nominal interest rate drift and hidden cost price increases have been prominent in the personal loan sector. All kinds of credit marketing advertisements that flaunt low daily interest and low monthly fees are very attractive, but after signing the contract, additional fees such as guarantee fees and service fees are charged. Such third party charges often exist in the form of independent contracts or supplementary agreements. They are not included in the interest calculation of loan contracts, making it difficult for consumers to compare actual financing costs horizontally. Some agencies use lengthy electronic contracts and quick confirmation processes to disguise the borrower's right to know. There are also practices such as bundling sales of high-priced membership cards and checking automatic renewal by default, making it difficult for consumers to prevent them.

On August 1, the “Provisions on Clarifying Comprehensive Financing Costs for Personal Loan Businesses” jointly issued by the China General Administration of Financial Supervision and Administration and the People's Bank of China officially came into effect. Personal loan interest rates changed from vague to open and transparent, and borrowers finally had a “clear account.” This move directly points to the persistent industry problems that have existed in the credit market for a long time. For some time now, the problems of nominal interest rate drift and hidden cost price increases have been prominent in the personal loan sector. All kinds of credit marketing advertisements that flaunt low daily interest and low monthly fees are very attractive, but after signing the contract, additional fees such as guarantee fees and service fees are charged. Such third party charges often exist in the form of independent contracts or supplementary agreements. They are not included in the interest calculation of loan contracts, making it difficult for consumers to compare actual financing costs horizontally. Some agencies use lengthy electronic contracts and quick confirmation processes to disguise the borrower's right to know. There are also practices such as bundling sales of high-priced membership cards and checking automatic renewal by default, making it difficult for consumers to prevent them.