Personal loans are also inherited

04/02/2025

When the holder of a personal loan dies, the debts do not disappear. They become part of the inheritance, which the heirs must decide whether to accept or reject. If they accept it, they also inherit any loans that the deceased may have taken out. There is the option of accepting the inheritance with the “benefit of inventory”, where the heirs are liable for the debts only up to the limit of the assets inherited, without compromising their personal assets. If no one wants the inheritance, the debt will be taken on by the State.

In addition, if the deceased had taken out life insurance associated with the loan, it would cover the debt, freeing the heirs from this financial burden.

However, the fact that there is insurance does not mean that the agreed interest automatically ceases to accrue or that the lenders cease issuing the corresponding monthly charges. These amounts will continue to be charged until the insurance company makes the payment, at which time the loan will be repaid early.

The Banco de España receives, sporadically, complaints regarding the amounts charged from the time of the holder’s death to when the insurance company takes over the outstanding debt. In these cases, the Banco de España analyses whether the entity acted diligently in this process. If the entity acted correctly, the accrued interest would not be refunded, since it is the remuneration of capital that the borrower has effectively disposed of. In any case, although the complainant may hold the insurance company or whoever caused the unjustified delay liable, this such assessment exceeds the Banco de España’s competence.