- 01
- Jun
It has been found that many consumers are being tricked into taking out payment protection insurance, whether it is for secured home loan loans or for unsecured tenant loans. A company called Which? Money found that many loan providers would automatically include payment protection insurance in quotes that are requested over the Internet or over the telephone. More than half the quotes that were received over the telephone automatically included payment protection insurance with very few lenders giving quotes without payment protection insurance. Many lenders offer online quotes with the payment protection insurance automatically, and if consumers are aware of what is included in the quote, they can then click onto another page to obtain a quote without the payment protection insurance.
Payment protection insurance is designed to cover the repayment of debts if the borrower fails to meet the monthly repayment either through illness or loss of job. Because the insurance is a form of protection for the lender many banks push consumers into purchasing payment protection insurance whenever they sign for a personal loan or apply for a credit card. However, these policies can often be expensive with many plans failing to provide the anticipated level of cover. Because many consumers are falling into the trap of having to pay for unnecessary coverage payment protection there have been many regulations placed on the market.
Payment protection insurance is not compulsory and not always suitable. Because many lenders are pushing consumers to take on payment protection insurance through automatic loan quotes, many people are easily tricked into buying the coverage regardless of whether they need it or not. Whether you plan on taking out a loan, or if you are currently paying monthly repayments on a loan, you will want to make sure that you are not making any unnecessary payments towards this type of insurance.
