Payment Protection Insurance aka PPI is designed to make your monthly loan repayments in case you are unable, due to accident sickness or redundancy. But customers who mis-sold their PPI could have debts are written off and the insurance refunded.
It is estimated 85% of customers take out mortgage payment protection insurance when purchasing a loan, credit card, or a mortgage for redundancy insurance or critical illness cover.
Borrowers could get their credit card debts written off due to being mis-sold credit card loans with Payment Protection which was unnecessary or not asked for?
It's important to note that the interest rate also known as the APR of a loan does not include the cost of payment protection.
A consumer should check the cost of the cover alone and work out if it is necessary and seek out more competitive quotes. Sometimes insurance can be purchased separately at a fraction of the cost.
If you are unhappy with the cost of the loan insurance or were not aware it had been added to your loan, you should be able to cancel the agreement.
Although some lenders will allow the loan to continue with the PPI removed, others may charge an admin fee.It can leave you covered in times of distress if you have the right cover, or you can be high and dry with no place to go if you don't.