PPI - Payment Protection Insurance

The selling of payment protection policies to accompany credit agreements in the UK is big business, recent figures released would suggest it is out of control. The vast majority of people looking to claim on their policy for loans and credit cards are being told they are not entitled to!

This is where lenders can really make a lot of money and as a result those selling the policies are under pressure to perform in the sale of them. With this in mind it is easy to see why so many people find themselves with unsuitable policies or even worse protection they did not even know they had!

How much difference could it make to a loan?

Whilst the difference in payments does not always seem too heavy on a monthly basis it adds up dramatically over the term of an agreement.

Borrow £10,000 over five years at 6.5% interest

Monthly repayment without insurance: £195
Typical monthly repayment with insurance: £230

While this difference might not look too big, when you actually consider it over the term of the loan, it is huge, as the table below shows:

This illustration is on the nicer end of the scale as well, the insurance always seems to eclipse the interest charges. In some cases we have looked at the payment protection has been as much as 40% of the total amount re-payable.

The Competition Commission finished a 15 month investigation into PPI in June 2008 and found the following results on successful claim rates. Car Insurance: 78% Home Insurance: 54% Mortgage PPI: 28% Personal Loan PPI: 15% Credit Card PPI: 11% Call now on 01642 636 244 or click here to contact us