Payment Protection

5limJim

Hi all,

This may sound like a radio show call-in, but am a long term reader of the message boards, but a first time poster on them...... (Thats that out the way!!)

I am now starting to look at getting my debts under some serious control, I have 2 credit cards,
1 x £4000 with HFC (Formerly Beneficial) 18.9%
1 x £4000 approx Lloyds TSB 15.9%
1 x £4000 Lloyds TSB Bank loan 12.9% (Monthly payment is £144)

The HFC card has been hanging around for years and years, and each month I am making the minimum payment, unfortunately I've fallen into a circle of using the Llloyds TSB Card to make the £135 payment for the HFC card, and paying £200 per month lump sum off the Lloyds card (Keeping both credit cards happy each month it seems).....

Though recently I've just noticed the Lloyds TSB card beginning to spiral out of control, whilst I pay 200 pound per month, this basically covers the 135 poubd payment, and the interest, but I can see the Payment Protection Insurance starting to creep my outstanding balance up.

As with everyone, money is tight but I was now pondering whether to cancel my Payment Protection Insurance, in todays market I'm sure I could get another job quite easily (I work in a call centre so its easy to move positions) the only problem would be if I fell ill for any particular reason (God Forbid!)... This way I would at least be stopping the increase in my balance through PPI, would you guys advise against me doing this, am hoping I can try and find a solution soon and this was one option, so that when I am in a position to start making those little bit more payments each month, it has a bigger impact....

Thanks Moneysavers


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Debt_Free_Chick

The general consensus is that PPI is .... pretty useless. It doesn't kick in straight away and for sickness it's common for it to pay out nothing until you've been ill for six months. Then it only pays out 10% of the outstanding balance.

You could get separate sickness insurance - the type that pays YOU an amount if you're ill and you then decide how to spend that money. Again, it doesn't pay out for short-term sickness.

It's worth looking at what your employer pays if you are sick. Some pay you in full for 6 months and then at half pay for another six months.

Martin has an article on PPI here
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1083023073,92723,

5limJim

Thanks Debt_Free_chick, signed up for the plan from payprotect in the article link you posted.....the cover for 300 pound per month would cover my main payment ot my credit card, and my bank loan also....

Without being a pain, is it theoretically possible for me to cancel the payment insurance with my bank loan also, or am I stuck with this for the term of the loan (Unable to find my documentation so cant remember what it says).....

Wish I'd acted sooner on some of these things rather than just beign a casual observer...... >:(

westernpromise

All you can do is ask the lender. PPI is a ripoff, though, because if you compare what you pay versus what you get it is typically about 8 or 10 times more costly than loss of earnings insurance.

5limJim

Thanks westernrpomise, reading this site has opened my eyes to the ways I can save money.... I was very much blinkered with what I was sold by Banks, credit card companies.... I've organised income protection elsewhere now, saving me £25 per month (But also including extra protection for my bank loan).....small steps at first is the main thing!!

As for banks...at least !!!!!! Turpin wore a mask!!!