Another Loan Protection question

markwilliams82

Hi everyone, whilst I'm logged on to my account I thought I'd post a question I had regarding my loan I have with Nationwide.

I took out a £16k loan over a 6 year period 3 years ago this December and I've got 3 years left to run. It ends December 2010 as far as I remember.

At the time, common sense prevailed and I took out the loan protection to be on the safe side. However, I have a settlement figure now in the region of £10k and a savings account with a balance of £4500. So I'm a good way there to reaching the settlement, and with my determination of trying to save £300 a month to go to my savings, I'm hoping to settle some time next year.

However, I was thinking whether I would still be able to cancel the loan protection so far into my loan? Obviously if I could do this, it would lower the settlement figure and make reaching the settlement figure alot easier and make my goals and dream of paying off my loan next year alot closer and obtainable :-)

Would I be able to cancel the protection? And if so, what kind of difference would it make to my loan roughly?

I wouldn't really think about doing this because of the term left, but because I'm aiming to pay off my loan next year, as well as just starting a permanent (paid monthly) job (which has enrolled me on a 1 1/2 training program) I'm quite happy to cancel the protection that I originally signed on for.

Any help would be appreciated, and I apologise for any spelling or grammar mistakes as I'm half asleep. I've had one of those rest less money worrying night times

angelavdavis

Hi Mark,

To be honest, without looking at your terms and conditions of your loan, it is difficult to answer your questions.

People's personal circumstances change which means PPI is no longer appropriate and the majority of PPI policies are a waste of time and energy as they rarely pay out due to a technicality or don't pay until a long period of unemployment, or only pay interest and not capital from the loan/credit card debts.

I would look at your terms and conditions to find out what you are likely to save as it should provide you with details of the cost of the insurance. If you can't find the paperwork, ask your provider what portion of your repayment goes on the insurance.

If they try to talk you out of cancelling (which they will as this is where they are making some real money on your debt) you need to say that you are in a position where you could repay the loan should you lose your income.

Hope that helps - sorry I can't give you a more pointed answer.

markwilliams82

Thanks for your reply. I just had a look on the Nationwide website. Obviously I know rates change etc., but with a new loan quote for the same amount and over the same period the total repaid was near £4k less.

The main interesting thing though, I clicked on the link for Payment Protection to get more information.....however, there was no real information, just the following statement....

"When taking out a personal loan you should consider your ability to maintain the monthly repayments. Nationwide does not currently sell Payment Protection Insurance to cover your repayments in the event of unemployment, accident or sickness. However, there are products in the market that will do this and insurers who sell this cover"

If they don't sell Payment Protection any more, does that mean I have more chance of being able to cancel mine?

rayday2

Do you pay monthly for your payment protection or was it added on at the beginning of the loan. If its montly you can probably cancel it and see a benefit if it was all added on at the beginning you could cancel it but I doubt you would see a huge reduction. Best thing is to ring and ask.

markwilliams82

I make my payments monthly, and from the quotes I got at the time, it looked like protection is paid monthly