Help! I don't want to pay Payment Protection Insurance

glittabug59

I got a graduate loan agreed over the phone by my bank. I'll be borrowing £2400 over 2 years at 12.9%. And I can just manage the monthly repayments of £113.

But when I went along today for an appointment to 'sign the papers' they tried to guilt me into paying an extra £10.85 a month in Payment Protection Insurance.

I know it doesn't sound much but I really can'tr afford an extra tenner a month - my budget it tight enough as it is - and I resent paying £240 extra over the loan term!

But I was told the bank needs assurance that they'd get the repayments if something happenned to me (ie. illness / unemployment). Which I suppose is fair enough.

So they asked me to provide them with some other sort of assurance. Either a copy of my employment sickness benefits, or another form of sickness insurance. I got the feeling they were saying 'do this or you can't have the loan'.

I'm going to look into what benefits my employer offers (can't recall off the top of my head) but what I wan't to know is:

-Is this normal procedure?
-Is it fair?
-Do I have any other options?
-Can any other loan provider give me a better deal?

Any advice would be appreciated.

metalgal

not sure about this but i wouldn't sign it. I thought PPI was entirely optional. If they are insisting on you having PPI then you could probably get it for much cheaper with another company.

I would definitely see about getting another loan without PPI, or maybe I am right in thinking that they are just chancing their arm in getting more money and bullying you into getting something that you don't want/is probably useless, in which case complain, there would be many people on this forum who would be happy to help.

good luck!

eden37

I work in a bank and sell this sort of insurance.The insurance is optional and this should have been clearly stated.It should also have been made clear that you taking or not taking the insurance makes no difference to the banks decision to grant the loan.You should have 30 days in which to cancel the insurance if you have signed for it.This information will be in the insurance documentation. If your work benefits are good or you have other insurance and you feel you dont want or need it dont take it but make sure you can pay the loan if you become ill ,lose your job or die!

inmypocketnottheirs

As above really. If you are being blagged that you have to have to get the loan, then take it and cancel within 30 days.

ireneT

You dont have to take out PPI with them or anybody else and they cannot force you to do that as it isnt legal and you should report them to the financial ombudsman have you not seen that adverts on tv about claiming it back on loans that were taken out within the last 6 years, that is one of the qualifying criteria for making a claim against the banks or companies that issued the loan in the first place so tell them this, but i should say their are a number of other places that you could get a loan even in this financial climate gl