Loan Insurance Cost Cutting discussion area

Former_MSE_Dan

This discussion relates to the updated Loan Insurance article.

Click reply to discuss.

scootermacc

Is it possible that PPI can have been mis-sold, and a complaint to the FSA may be upheld?

I've seen a few people recently on TV who were told by their lender that "if you don't take out our insurance, you won't get the loan".

Surely there is a case to answer if they aren't advised that a. they may not need PPI at all, and b. other companies offer PPI too?

Anyone any thoughts on this?

Wallis_2

Please advise, I want to borrow 6K ontop of my mortgage as the repayments are so low, and have looked at all options. Put my bank Halifax wants a fee of £275 to do this. I can change my re-payment mortgage mid 2006 to a cheaper lender if I can save , but HOW Can I get around the fee ?

Walter

jingle

I have just read the very interesting article on ppi. In the box "Some Lenders’ policies" Liverpool Victoria is listed as allowing canceling of ppi separately, but I have been told by customer services that I can cancel only within 30 days of starting the loan.Am I being fobbed off, or is the information in the article wrong?

creditcardking_2

When taking out an unsecured loan I find it much cheaper to borrow an extra sum being 12 months worth of repayments. I would place these funds in a high interest account. If I am having financial difficulties then I have 12 months grace to sort things out, or I can pay off the loan 12 months early. This costs me around 1% extra in interest ( the difference between the loan interest and the high interest account) but I think its better than payment protection insurance.

Rafter

Scooter. I think not linking PPI to the loan is only a banking code item. Ie self regulation so it doesn't cover all lenders.

Wallis. You can't get around the fee. Remember that paying off a £6k loan for something like a car over a 25 year mortgage is a bad idea. If the £6k is for long term home improvement then no problem. You may be better off getting a flexible loan with someone like cahoot for 9 months then remortgaging in mid 2006.

Creditcardking - what a great system. Given that most PPI policies only pay out for a year you could save a fortune doing this.

I reckon if you took out a £10,000 loan over 5 years it would cost you £197 a month at 7% APR. Even if you only earn 4% on savings, if you borrowed £12,500 instead to give you a repayment cushion, it would only cost you and extra £5 a month and not the £50 per month a PPI policy might cost.

R.

ali1978

GOOD NEWS!!! I just complained to Lloyds about my £2000 worth of PPI after 4 years of having my loan. Lloyds have agreed to refund it in full plus the interest I have paid as a "gesture of goodwill". The crux was that I made a compalint on the basis that the £2000 insurance policy (on an £8000 loan), had been mis-sold to me. This is because I had not understood the terms. Which is technically their fault as the FSA states that they are responsible for explaining the terms and the cover properly, including exceptions. I had not in fact realised I had this insurance at all until last week. (Embarassingly!) When I took the loan out as a graduate it was implied that I was making the £2000 payment as a necessary admin charge and that I could not take the loan out otherwise. In reality I was self employed and still am so I would not have been covered anyway. Lloyds should not have sold me an unsuitable product. I feel that I was mislead. My advice: Plead complete ignorance and say that it was mis sold to you. It probably was!
Good luck

bpakoue

I really need some advice, i'm drowning in debt at the mo and trying to sort it all out. I have two loans and both with PPI's. On one loan, i've just found the agreement i should have sent in June. I never did send it even though it states that i must return it by a given date, does that mean that even though they have been taking money from me, should the need arise for me to claim, they would say that i wasn't covered in the 1st place? Can i cancel it?

2nd PPI: when i took out the loan, i was told i had to get PPI in oder to qualify for the loan. I've just read the agreement and it does say that i do not need to pucharse PPI in order to get the loan. Alo because of my past history, i'm being charged 17.9% by Abbey this gets worts because the PPI is also charged at the same rate! this is all on a 7grand loan. Can i argue that the rate on the PPI is unfair since i pause no more likelyhood of making a claim then anyone else? i have no medical history which makes it more likely for me to fall ill, i've been in the same job for 6 yrs and have two depends.

Do i have an argument here? Plz help.

Headieboy

I phoned the Bank of Scotland last year for a loan and was told the interest rate was (I think) 8.9%. When I said that I didn't need the PPI, I was told that the interest rate would be 17.9%!! On the loan the repayment with PPI would be £240 and about £210 without. The guy I spoke to couldn't see that, even paying the higher interest rate, I would still be better off. Needless to say I didn't take the loan with them!

I don't need PPI as I work for an employer who pays me full salary for the 1st 6 months off and then 50% of my salary for the next 6 months. As most (if not all) PPI only pay out for 1 year, I cancelled all PPI I had a few years back.

To bpakoue: How long have you had your loan? It may be that your credit scoring is better now and you may qualify for a better interest rate. Remember it's not the best idea to take out a new loan to repay an existing one as, even though you may have paid the loan for a while, the settlement figure may be greater than the existing loan amount.