Loan payment protection

[Red ones]

I have covered the mortgage and the car loan.

I don't bother with Credit Cards.


CCs are the lowest of the low priorities as far as repayment comes. The others are secured against an essential, if I can't afford the CC then thats where bargaining with the card issuer comes in to the frame. Besides I consider the protection on cards as an extension of the interest rate. If you pay 1.20% pcm interest then add another 1% loan repayment protection you are effectively paying 2.20% to service the debt. Would you take out a credit card if they said the APR was 30%?? Don't think so. Invest the 1% for the PPP off hte loan amount and reduce the loan faster.


Visit www.fool.co.uk for some sound advise. SOmewhere there are some loan and credit card repayment calculators - look for the ones that calculate on a principle called "Snowballing" the repayment then starts to look shocking and might convince you to consider self-insuring (there is a risk, however you do reduce the period of the repayment)[/url]

A seperate cover-all policy is generally the most cost effective.

Individual payment protection policies on loans and cards are the profit makers for the banks. Hence them being very keen for you to take them out.

PS they cannot refuse you a loan because you choose not to take it out, otherwise it is a conditional sale and the cost should be added to to the apr.

As usual shop around.

Take into account your employers benefit (speak to your personnel dept to find out exactly what you would or wouldn't get-don't take the 'bloke in the pub's' word for it- he's generally talking ****)

If you haven't got any cover and you're off ill a long time £74 per week, statutory sick pay (i think, approx, disclaimer disclaimer) aint gonna go far.

If you've got a mortgage (taken out after Oct 1995) you get ZERO housing benefit for 9 MONTHS. good luck keeping your house!

Kinda makes you think, dunnit?

It'll never happen to you though.....cos....er.....you're Batfink, your wings are like a shield of steel!

yeah right

the policies which come with the loans, etc are a real con IMO - the benefit that they deliver for the cost is pretty poor. And you also need to be careful about clauses in the small print which mean that they don't deliver when you need to use them, e.g. Etienne had payment protection on a loan but when made redundant they refused to pay out because their criteria was that he had to be claiming unemployent benefit. Since he's not a British citizen he isn't eligible to do so - and they knew that this when they set up the loan & protection cover.

Income protection on the other hand means that if you can't work you have more than just your loans paid, you also have money to live on.

TBH if it's all too much of a headache to figure out yourself, if you can find half an hour to talk to a financial advisor you should find that they can fix you up with income cover tailored to your needs (e.g. taking into account the sick pay that you would get through work, etc) and end up with better cover at a lower cost. Certainly worked for us!

Originally Posted by Jools'SV Now

It'll never happen to you though.....cos....er.....you're Batfink, your wings are like a shield of steel!

yeah right

especially apt given that we're all bikers here, and we all have friends who've had to take time off due to accidents...

oh, and make sure any policies which you take out cover you for riding bikes as well - some don't