Borrowed 63,000 yuan, paid insurance premiums of nearly 20,000 yuan. How did the loan come bundled with insurance?

Southern Finance All Media Reporter Lin Hanyi, Intern Xu Ruoxuan

“If I hadn’t started checking old bills one by one, I might never have known that over the past few years, I’ve been paying for insurance I’ve never seen before.”

Recently, 21st Century Business Herald received a report from consumer Mr. Zhao, who said that during an online loan process, a high insurance fee linked to the loan was deducted simultaneously, even though he had never purchased insurance, signed any contracts, verified his identity, or received any policy or notification from the insurance company.

Complaints about “loan bundling with insurance” are not uncommon on online platforms. Some borrowers report being forced to buy credit guarantee insurance without their knowledge or by default, significantly increasing overall financing costs. Industry insiders point out that credit guarantee insurance was originally intended to provide credit enhancement support for borrowers, but in some practices, it has been involved in forced bundling and disguised charges.

Recently, regulatory authorities issued the “Regulations on Clear Disclosure of Total Financing Costs for Personal Loan Business,” which has reignited concerns about the legality of bundling loans and insurance.

The “Invisible Policy” Falling from the Sky

From April 2022 to January 2023, Mr. Zhao applied for and received loans from multiple online lending platforms due to cash flow needs.

According to his account, the loan approval process was very fast and smooth. However, during reconciliation and review of his personal debt history, he discovered that in multiple loans, inexplicable insurance fees were deducted simultaneously. As the nominal “policyholder,” Mr. Zhao was completely unaware of these eight policies.

He recalls that during all operations on the loan page, there was no clear or independent option to purchase insurance, nor was there a separate confirmation step for “whether to buy insurance.” “I have never signed any insurance contracts, application forms, or authorization documents by hand or electronically. I also never received any confirmation calls, texts, or other identity verification notices,” he emphasized.

Moreover, after the premiums were actually deducted, he received no policy documents or notifications. It was only years later, when reviewing his historical bills one by one, that he discovered this hidden deduction.

Mr. Zhao’s experience is not unique.

On the Black Cat Complaint platform, there have been over 7,000 complaints related to “loan bundling with insurance,” involving banks, insurance companies, consumer finance companies, and small loan companies.

One user posted a bill: a loan of 63,000 yuan was forcibly bundled with insurance, with a monthly insurance fee of 554.4 yuan, over 36 installments, totaling an additional 19,944 yuan in insurance fees.

Many other borrowers also reported being forced to buy credit guarantee insurance without their knowledge or by default, greatly exceeding their expected total financing costs.

Additionally, a borrower on Black Cat Complaint reported that when applying for a 150,000 yuan loan, they were forced to bundle guarantee insurance with a premium of up to 24,480 yuan. The salesperson did not inform them, and the platform system was down, making it impossible to issue an invoice.

If consumers are unaware, how is the insurance process completed, and how are premiums deducted?

It is understood that the insurance quietly bundled in these online lending scenarios is mainly credit guarantee insurance, originally designed to serve as a credit enhancement function. According to regulatory requirements, like other insurance, purchasing insurance is entirely voluntary. Before buying, full disclosure must be provided, and insurance companies or online lending platforms must separately inform users about the insurance’s functions, responsibilities, and default impacts. Real-name verification is required at the time of purchase, and an electronic policy must be issued after independent underwriting by the insurance company.

In the cases mentioned above, the relevant disclosures and procedures were hidden within the loan process, effectively concealed. Even the insurance fees were not paid directly by the individual to the insurance company but were deducted through the platform or third-party payment channels. As a result, consumers believed they were only applying for a loan, unaware that they had also purchased insurance.

Yang Xiang, senior advisor and lawyer at Beijing Hongfan Law Firm, told 21st Century Business Herald that in some practical operations, certain credit guarantee insurances have been controversial for transforming from a “credit enhancement” tool into a “revenue-generating” channel, with some cases of forced bundling and disguised high-interest charges.

“This not only violates the principles of honesty, good faith, and fairness in civil and commercial law, depriving customers of their autonomous choice rights, but also causes the overall financing costs for borrowers to become excessively high, contradicting the essence of inclusive finance,” Yang Xiang said.

The Beijing Financial Court has formed a research team to analyze nearly five years of guarantee insurance cases across the country and the cases handled by the Beijing Financial Court over the past three years, examining regional, jurisdictional, amount, and case resolution aspects.

The court found that current financing guarantee insurance businesses generally face issues such as unclear bundling, forced bundling, disguised high-interest charges, and providing guarantees for subprime loans, which could pose systemic financial risks.

In May 2020, the former China Banking and Insurance Regulatory Commission issued the “Regulations on Supervision of Credit Insurance and Guarantee Insurance Business” (hereinafter referred to as the “Regulations”), which clarified that guarantee insurance refers to insurance based on credit risk arising during contract performance. Financing credit insurance refers to insurance that provides protection against credit risks during the performance of financing contracts such as loans and leasing.

In financing guarantee insurance, the policyholder is the obligor in the contract, the borrower, and the insured is the rights holder in the contract, the lender.

Currently, financing guarantee insurance mainly exists in areas such as personal consumer loan performance guarantee insurance, bank commercial loan guarantee insurance, internet financial platform loan guarantee insurance, and auto finance contract performance guarantee insurance.

The characteristic of financing guarantee insurance is to assist credit and facilitate lending, helping long-tail customers lacking collateral access financing, making it an important part of inclusive finance.

However, when lenders implement “bundled sales” of credit loans, requiring borrowers to purchase corresponding guarantee insurance from affiliated insurance companies, the combined charges for interest, premiums, and penalty fees can exceed reasonable limits, harming financial consumers’ rights.

On March 15, 2026, the China Banking and Insurance Regulatory Commission and the People’s Bank of China jointly issued the “Regulations on Clear Disclosure of Total Financing Costs for Personal Loan Business,” requiring all financial institutions engaged in personal loan business to clearly disclose the comprehensive financing costs before lending, including but not limited to loan interest, installment fees, credit enhancement service fees, and potential costs under default scenarios such as late payment penalties.

Officials from the relevant departments of the China Banking and Insurance Regulatory Commission and the People’s Bank explained that the rapid development of the personal loan market in recent years has played a positive role in promoting personal consumption and business operations. However, some institutions have engaged in irregular and non-transparent fee disclosures, which can lead to financial disputes, affect the effectiveness of interest rate policies, and weaken the quality of financial services to the real economy.

In addition, the regulatory authorities have introduced multiple departmental rules and normative documents to regulate unfair and forced bundling practices.

As early as September 2020, the former China Banking and Insurance Regulatory Commission issued the “Pre- and Post-Management Operational Guidelines for Financing Guarantee Insurance Business,” which explicitly states that insurance companies should safeguard consumers’ right to information and autonomous choice, and must not forcibly bundle or sell other insurance products against the policyholder’s will.