--- title: "Personal Loan Pricing Boundaries Disclosed: Multiple Banks Reveal Financing Cost Caps; Mortgage Rates Converge, While Consumer and Business Loans Diverge" type: "News" locale: "en" url: "https://longbridge.com/en/news/294706245.md" description: "On the eve of the August 1 implementation of the \"Provisions on Explicit Disclosure of Comprehensive Financing Costs for Personal Loan Business,\" multiple banks centrally announced the upper limits on the annualized comprehensive financing costs for personal loans. Among the large state-owned banks, ICBC, ABC, Bank of China, and CCB set the cap for consumer and business loans at 6%, while Bank of Communications and PSBC set it at 12%. Mortgage rates are linked to the Loan Prime Rate (LPR), while pricing for consumer and business loans shows a diverging trend, aiming to enhance market transparency and facilitate cost comparison for borrowers" datetime: "2026-08-03T14:09:20.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294706245.md) - [en](https://longbridge.com/en/news/294706245.md) - [zh-HK](https://longbridge.com/zh-HK/news/294706245.md) --- # Personal Loan Pricing Boundaries Disclosed: Multiple Banks Reveal Financing Cost Caps; Mortgage Rates Converge, While Consumer and Business Loans Diverge Multiple banks have centrally disclosed their pricing boundaries on the eve of the new regulations on personal loan cost disclosure taking effect. The core change in the personal credit market is not a uniform rate adjustment, but rather the inclusion of interest rates and other related fees into a single annualized disclosure framework. On the evening of July 31, ICBC, ABC, Bank of China, CCB, Bank of Communications, PSBC, as well as China Merchants Bank, CITIC Bank, Industrial Bank, and China Everbright Bank, among others, publicly announced the upper limits on the annualized comprehensive financing costs for personal loans under normal performance conditions. These announcements were made in response to the "Provisions on Explicit Disclosure of Comprehensive Financing Costs for Personal Loan Business," which came into effect on August 1. Looking at the upper limits on annualized loan interest rates published by each bank, a clear tiered pricing structure has emerged. For ICBC, ABC, Bank of China, and CCB, the caps for personal consumer loans and personal business loans are both 6%. For Bank of Communications and PSBC, the caps are 12%. For China Merchants Bank, CITIC Bank, and Industrial Bank, the caps for non-cooperative consumer and business loans are 12%, while cooperative personal internet loans are capped at 24%. China Everbright Bank further segmented its products: the cap for personal business loans is 8%, for "Guangsu Dai" (Speed Loan) and "Guangsu Business Loan" it is 12%, and for cooperative loans it is 24%. All banks emphasized that personal loans are subject to differentiated pricing. The disclosed figures represent the upper limits under normal performance conditions, and the specific interest rates are still subject to the loan contracts signed between the bank and the customer. For borrowers, the change is primarily reflected in easier cost comparison; for banks and their partner institutions, product pricing and fee structures will become more transparent. ## **State-Owned Large Banks Split Caps into Two Tiers** The caps announced by ICBC, ABC, Bank of China, and CCB are largely consistent. For all four banks, the annualized interest rate cap for personal consumer loans (excluding credit card loans) is 6%; the cap for personal business loans is also 6%. Notably, ABC specifically stated that loans to farmers are included in the scope of personal business loans. Regarding personal housing mortgage loans, the annualized interest rate cap for terms of five years or less is the 1-year LPR + 0.5%, and for terms over five years, it is the 5-year LPR + 0.5%. Bank of Communications and PSBC adopted a different tier. The annualized interest rate caps for personal consumer loans and personal business loans at both banks are 12%, which is 6 percentage points higher than the aforementioned four large state-owned banks. There is no difference in the mortgage caps between these two banks. The cap for terms of five years or less remains at the 1-year LPR + 0.5% (simple interest), and for terms over five years, it is the 5-year LPR + 0.5% (simple interest). This means that the six large state-owned banks are aligned on housing mortgage loan caps, but have formed two tiers for personal consumer and business loans. It is important to note that 6% and 12% are upper limits. They do not mean that banks will lend to all customers at these levels, nor do they imply that the actual loan prices at Bank of Communications and PSBC are necessarily higher than those at other state-owned banks. Each bank noted that these are interest rate caps, and the specific loan interest rates are subject to the rates agreed upon in the loan contract signed between the lending bank and the customer. ## **Joint-Stock Banks List Cooperative Internet Loans Separately** The structure of the annualized comprehensive financing cost caps for personal loans under normal performance conditions disclosed by China Merchants Bank, CITIC Bank, and Industrial Bank is basically consistent, with cooperative personal internet loans listed separately. For these three banks, the annualized interest rate cap for personal consumer loans (excluding credit card loans and cooperative personal internet loans) is 12%; the cap for personal business loans (excluding cooperative personal internet loans) is also 12%; while the cap for cooperative personal internet loans is 24%. Regarding housing mortgage loans, these three banks continue to use the same caps as the state-owned large banks: the annualized interest rate (simple interest) for loans of five years or less does not exceed the 1-year LPR + 0.5%, and for loans over five years, it does not exceed the 5-year LPR + 0.5%. The separate listing of cooperative personal internet loans is the most significant structural difference in the disclosures by joint-stock banks. The 24% cap applies only to the corresponding cooperative loans and not to all personal consumer or business loans offered by the banks. China Everbright Bank's classification is more detailed. The bank's annualized interest rate cap for personal consumer loans is 12%, for personal business loans it is 8%, for "Guangsu Dai" and "Guangsu Business Loan" it is 12%, and for cooperative loans it is 24%. The housing mortgage loan caps remain at LPR + 50bp for terms of five years or less, and LPR + 50bp for terms over five years. From this classification, it can be seen that even within the same bank, traditional personal business loans, online products, and cooperative loans may be subject to different caps. For borrowers with needs, confirming the product category and application channel is equally important. ## **Mortgage Caps Highly Consistent** Compared to the clear stratification of consumer and business loans, the personal housing mortgage loan caps across various banks are highly convergent. Based on the disclosed information, the annualized interest rate cap for mortgages of five years or less is generally the 1-year LPR plus 50 basis points, while for mortgages over five years, it is the 5-year LPR plus 50 basis points. This arrangement means that mortgage caps adopt a floating benchmark rather than a fixed absolute interest rate. When the LPR changes, the caps will change accordingly. However, the cap is not the actual executed interest rate, nor is it the minimum rate. All banks retained room for differentiated pricing in their announcements, and specific loan interest rates are subject to the rates agreed upon in the loan contract signed between the customer and the bank. China Merchants Bank also reminded customers to reasonably assess their income levels and debt repayment capacity when applying for personal loans to avoid excessive indebtedness. It advised paying attention to the comprehensive financing costs of personal loans and fully understanding information such as cost items, collection methods, collection standards, annualized levels, collecting entities, and liability for breach of contract. ## **The Real Change Is Full-Scope Disclosure** The institutional background for this centralized disclosure by banks is the "Provisions on Explicit Disclosure of Comprehensive Financing Costs for Personal Loan Business" issued by the National Financial Regulatory Administration and the People's Bank of China. According to these provisions, the comprehensive financing cost for personal loan business refers to various interest and fees related to the loan borne by the borrower, including but not limited to normal performance costs such as loan interest, installment fees, and credit enhancement service fees, as well as contingent costs under default scenarios such as overdue penalty interest. Lenders shall reasonably determine the annualized level of comprehensive financing costs in accordance with laws and regulations. The provisions require that _lenders shall clearly disclose the upper limit of the comprehensive financing cost for personal loans under normal performance conditions through channels such as business premises and official websites._ _For personal loan business handled on-site, the borrower shall sign and confirm on the explicit disclosure form of comprehensive financing costs before signing the loan contract or processing installments. For personal loan business handled online, the explicit disclosure form of comprehensive financing costs shall be displayed to the borrower via pop-up windows, with a mandatory reading time set, for confirmation by the borrower before signing the loan contract or processing installments._ _For installment payment business handled in online consumption scenarios, the loan principal, installment arrangements, service fees charged, collecting entities, annualized comprehensive financing costs under normal performance conditions, and contingent cost items and collection standards under default scenarios shall be clearly and prominently displayed on the payment page of the consumption order. At the same time, it should be explicitly stated that no other interest or fees will be charged besides the explicitly disclosed cost items._ For banks, the impact falls first on information disclosure, product management, and cooperative channel management. Especially after cooperative personal internet loans are listed separately, the fees charged by banks and partner institutions, who collects them, and the resulting comprehensive cost will be presented more directly to borrowers. Therefore, this round of centralized disclosure is closer to a reform of personal loan pricing transparency rather than a synchronized interest rate adjustment. What banks are disclosing are the price boundaries they can charge; what the new regulations truly change is the way borrowers see and compare loan costs. Risk Warning and Disclaimer The market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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