A UK personal finance blog and account of a personal finance website owner.
A UK personal finance blog and account of a personal finance website owner.
It’s been a while since I’ve written anything but this had to be said! A lot more information is being made available regarding loan payment protection and the cost to the borrower and the benefits of shopping around for prices.
I recently looked at the figures and found some staggering results.
One lender quoted for a £10,000 loan over 7 years, repayments of £158 without loan protection or £213 with protection.
That’s £55 per month just for the protection.
Whereas, loan repayment protection insurance from an independant provider can cost as little as £2.50 per month.
Yes, it’s true.
http://www.antinsurance.co.uk will cover repayments of £160 for up to 12 months for only £4.
£4 covers the repayments for 12 months and provides Accident, Sickness and Unemployment cover.
If you’re self employed, it’s not worth getting unemployment cover because it will only kick in once the company is in the hands of the receivers and you’ve signed on.
So for a self employed person taking out Accident and Sickness cover to meet the loan repayments for 6 months, the price quoted online today was only £2.50 per month.
£4 per months gives 12 months of repayments and Unemployment cover as well.
Do the maths.
4/55 x 100 = 7.3%
That’s comparable loan repayment protection insurance for less than 10% of the cost quoted by the lender.
£4 x 12 = £48 per year
Compared to:
£55 x 12 = £660.
What would you do with that extra £612??
http://www.paymentcare.co.uk/ also provide a range of protection policies including life cover and mortgage repayment protection.
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November 27th, 2007 at 2:02 pm
thanks
great post
September 9th, 2008 at 6:43 pm
Secured Home Loans for UK Homeowners…
a list of secured loan brokers and sites that offer advice for homeowners looking for secured loans…
December 4th, 2008 at 4:12 pm
It’s good to see posts like this which explain the breakdown in costs.
Also to champion the online independent suppliers of loan payment protection insurance.
The problem with loan payment protection insurance is that its usually sold as ASU for the loan at the point of sale and in one lump sum.
Borrowers may be better served by taking out an ASU policy as a Mortgage Payment Protection Insurance policy from an independent supplier such as British Insurance Ltdthey have a mortgage or a lifestyle or income payment protection policy if not.
December 4th, 2008 at 4:46 pm
As of the end of January next year it is highly liekly that the large lenders will not be able to sell loan payment protection insurance piggybacked onto their loan offerings, due to enforcement of a fourteeen day cooling off period recommended by the competition authority.
This should make the market much more competitive for independent suppliers of loan payment protection insurance such as ourselves and the others previously mentioned.
It should also encourage better cover.