Loan loaded with life inssurance?? is this allowed??

chock_chock

I took two loans out with one of major banks about over 3 years ago, one personal loan for £100 k to help buy the property and another as business loan for £25k to stock up the business.(both loans over 15 years), but the bank had added my life inssurance to the loan for the duration of the term to my loan, hence my loan of £100,000 became £113,000 and my second loan of £25,000 became £28,000 so in effect they have charged me 15 years of life inssurance and added it to my loan and charging me interest on this.

I did asked them soon after, what are these extra amount for? They said it was the only way they were going to lend. (Is this legal?)

Can I give them notice that I will arrange my own life inssurance and ask them for the remaining inssurance monies back?
Any help and advise will be appreciated.

regularsaver1

Maybe they have this wirriten into their contracts incase you die, they want to be sure they will get their money back?