China’s Ministry of Finance (MOF) and two other central authorities have extended the personal consumer loan interest subsidy policy through December 31st, 2026, providing continued support for household borrowing costs as part of broader efforts to stimulate domestic demand. The policy, originally launched under a pilot framework in 2025, was formally extended and optimized through a joint notice issued in January 2026 by the MOF, the People’s Bank of China (PBOC), and the National Financial Regulatory Administration (NFRA). Under the extended framework, each borrower may receive a cumulative subsidy of up to 3,000.00 yuan per year from a single participating lending institution, a cap that remains unchanged from the previous iteration of the policy.
The subsidy operates on a straightforward mechanism: the annual interest subsidy rate is set at 1.00 percentage point, calculated on the principal of eligible consumer loans that are verifiably used for consumption purposes. The subsidy amount is capped at 50.00 percent of the loan’s contractual interest rate. The policy covers a broad range of consumption categories, and the January 2026 optimization removed previous restrictions on consumption sectors, meaning eligible spending across all areas can now qualify. Credit card bill installment services were also brought into the subsidy framework for the first time, further expanding the scope of support.
Implementation has been rolled out across multiple levels of the financial system. Beyond the six major state-owned banks and national joint-stock banks, the optimized policy authorizes provincial-level finance departments to include city commercial banks, rural cooperative financial institutions, foreign banks, consumer finance companies, and auto finance companies with regulatory ratings of 3A or above as participating institutions. The funding structure splits the subsidy burden between the central and provincial governments, with the central treasury covering 90.00 percent and provincial authorities covering 10.00 percent. By mid-2026, provincial governments had begun disbursing funds to lending institutions on a quarterly basis, with the central government having pre-allocated subsidy funds to provincial finance departments in the first quarter.
The extension reflects a broader policy strategy to sustain consumption momentum through fiscal-financial coordination. As of August 2026, Sichuan Province alone reported that the policy package had guided financial institutions to issue more than 750.00 billion yuan in related loans, benefiting over 3.40 million business entities and households. The policy is scheduled to expire at the end of 2026, though officials have indicated that further extension will be considered based on implementation outcomes. For borrowers, the practical effect is a measurable reduction in effective borrowing costs, though the benefit depends on loan usage patterns and institutional participation, as subsidies only apply to consumption transactions identifiable by the lending institution.