Loan Protection - is is mandatory? can it be?

a_hardcastle

I took out a loan some time ago with HSBC and was told they would only consider my application if I took out the loan protaction with it (I dont normally), most places usually state its 'optional'.


Can they insist on Loan Protection? What if I say I'll get my own independant loan protection - does that count?

regards

A.

_Andy_

It's not mandatory - they just get less points/bonus for selling the loan without protection.

a_hardcastle

Hmm.. have I therefore been mis-sold the loan protection?

A.

jamesd

Time to complain to HSBC and seek recovery of the premiums paid for the payment protection and cancellation of the policy.

Hermione54

They cannot require you to take out loan protection, but banks make a lot of money from this racket. Take it out if you must to get the loan, then cancel the insurance within the statutory cooling off period.

Tootsie_Roll

This is a bit of a grey area. I do agree they cannot insist you take out the cover however they can simply decline to give you a loan at all if you don't. They may do this becasue they believe you are a greater risk than the norm for some reason.

inmypocketnottheirs

What you can do is shop around on t'internet and see if you can get payment protection cheaper - which you invariably will.

Tomarse_2

Tootsie_Roll wrote: »

This is a bit of a grey area. I do agree they cannot insist you take out the cover however they can simply decline to give you a loan at all if you don't. They may do this becasue they believe you are a greater risk than the norm for some reason.

Yep.

But there's nothing they can do about it if you accept the PPI and then cancel it at no charge as soon as the loan is accepted.:cool: