Who can claim? « Euro Weekly News

If you have taken out a loan in Spain and paid an insurance premium in advance, you may have been charged interest. According to the Organisation of Consumers and Users (OCU), which recommends that people review their loans, some may be able to recover hundreds of euros.

The warning concerns the practice of banks and other credit institutions in stipulating the cost of insurance as part of the loan. This practice makes it so that the client not only pays the loan but also interest on the insurance.

It is common practice to offer insurance in connection with loans, especially car loans.

In a statement published on October 6, Spain’s Organisation of Consumers and Users (OCU) said that the ruling of the Court of Justice of the European Union (CJEU) has made a stronger case against the imposition of charges.

The judgment does not mean that all borrowers are entitled to a refund. But it gives consumers who financed some insurance premiums at the same time as their loans a reason to review their agreements.

Why some borrowers in Spain may have paid too much interest

When you apply for a loan, the lender may propose an insurance contract that will pay the loan in case of death or inability to pay. There are policies for which the sum assured is payable by one premium, known in Spain as seguro de prima única.

The lender, instead of asking his client to pay the insurance premium as an extra charge, may add it to the loan as a necessary expense.

A borrower who is applying for a loan of €20,000 can have a premium of €1,000 added on to it, making his interest more expensive in the long run.

OCU says that the problem comes when the creditor charges interest on the part of the loan used to cover the costs of the credit, which are not granted to the consumer.

On April 23, 2026, the Court of Justice of the European Union ruled in case C-744/24 that banks cannot charge contractual interest on amounts used to cover credit-related costs, such as insurance premiums, that are not actually made available to consumers. The court distinguished between the sums actually advanced to the consumers, and the expense of taking the loan.

This can include interest, fees and insurance premiums, but the money is not simply borrowed by the customer and calculated like a loan. Although the case originated in Poland, the court’s interpretation of EU consumer credit law is also relevant to similar disputes in other member states, including Spain.

The Spanish courts have examined certain insurance contracts linked to loans. They are especially concerned with those arrangements where the customers were not provided with sufficient clear information, or when they were required to buy the insurance from companies affiliated to the credit provider.

How much money could borrowers reclaim?

OCU has furnished a numerical example of the accumulation of the additional charges.

OCU gives the example of a €20,000 personal loan taken out on March 15, 2021, over five years at a nominal annual interest rate of 10 per cent. A €1,000 single-premium insurance policy financed alongside the loan would have generated approximately €275 in additional interest. A further €33 in statutory interest could bring the potential claim to around €308.

This is an example rather than a standard refund amount.

The precise sum would depend on the insurance premium, the rate of interest, the term of the loan, the terms of the contract, and the success of the claim.

OCU identifies two potential routes for affected consumers.

The first one relates to the claim itself, where the insurance contract had been imposed or sold without sufficient transparency on the costs and financial consequences.

The second is that of the recovery of interest on a loan corresponding to the insurance premium, even where the insurance policy is valid, as long as certain legal conditions are fulfilled.

The distinction is important, because the policyholder can contest the additional interest even without attempting to rescind the contract.

Although the latest OCU campaign is primarily a concern for loans to individuals and car loans, the same concerns are also surfacing in lawsuits involving mortgages in Spain.

In June 2026, Spain’s Supreme Court declared against a mortgage provision which required the borrower to take out a single-premium life insurance policy from a bank affiliated with the lender.

It was a decision about the terms and transparency of the mortgage; this should not be taken as implying that it automatically voids any insurance policy sold together with a mortgage.

How to check whether you could make a claim

OCU has been encouraging borrowers to review the original contract for a loan and also the related insurance policy or extra charge.

It is to be established whether the premiums for any life insurance or credit insurance policy were paid in advance and added to the sum lent.

The borrowers must then see how the loan and interest are calculated, whether they pay interest on insurance.

Particularly those who have financed a vehicle through dealerships, where the loan contract might also include such additional products as a service contract or an extended guarantee, will find it beneficial to examine such offers with care.

Depending on the documents, if there is a suggestion that the client has paid interest on the costs that should not be a part of the credit, OCU recommends an individual assessment of the loan contract.

A successful claim is not automatic, and is subject to the exact wording of the contract, the circumstances under which it was taken out, and the rules of law.

To file a complaint, consumers should keep a copy of their loan contract, insurance policy, payment program and all correspondence.

For the borrowers who have been repaying for several years, an examination of these papers could show them additional charges which they had not seen in the original papers.

But in any case, the new guidelines are not establishing an automatic repayment of any fixed sum to all bank customers. Rather they offer Spanish consumers a clearer starting point for questioning whether they have been billed for money that has never been paid to them.