Is this a loophole?

dovedale_2

Hi

Lenders are all about making money. They dont make so much money on a straight low 6% apr or whatever and are naturally keen to sell PPI and other things that quite a few people (including myself) dont want.

When applying for a loan to consolidate my debt they asked if I would like to pay £x to get the money the same day, and more importantly asked if I wanted PPI.

Can I get aound the system; i.e. increase my chances of been accepted, by agreeing to sign up for PPI at the application stage and then cancelling it asap once the loan is in place?

I understand that with some you can't cancel the PPI but don't think this applies to all lenders?

tom188

You should have a statuatory cancellation period for the insurance.

regularsaver1

The acceptance of ppi should have no bearing on whether the loan if offered or not. It should be optional

Astaroth

There is no requirement for PPI to be optional but making it compulsory is seen in a negative light (the FSA recommend you go to another lender if your current one insists on you have PPI but you dont want to)

Whilst you do have a statutory right to cancel insurance within the first 14 days at the same time almost all loan agreements give the lender the right to cancel the loan giving 1 months notice. It is therefore possible to do what you suggest but then find the loan is called in because they do not want the risk of you having their money without insurance to cover it.