Question about a Loan

mysticsniper · 12 Oct 2006 at 20:25

I have applied for a loan, with protection. The paper work came through for me to sign, but I have seen that the loanprotect and its about £3k, but its saying that I have to pay interest on the loan protection and it takes the final total to around £5k, which is half the amount I am borrowing.

Surely that isn't right :confused:

I tried calling the bank, but there office is closed

Gilly · 12 Oct 2006 at 20:30

They want you to pay protection on the loan and they want to pay insurance on that protection?! Christ :/

crystaline · 12 Oct 2006 at 20:37

The PPP (Payment protection plan) is to protect them, not you.

mysticsniper · 12 Oct 2006 at 20:43

crystaline said:
The PPP (Payment protection plan) is to protect them, not you.

Yes, I know that but why should I have to pay interest on an insurance policy. Its like when I take my car insurace out, I pay a fixed rate, even if I pay monthly I don't get charged 7.6% on top of the fee quoted, if you see what I mean :confused:

Pez · 12 Oct 2006 at 20:45

crystaline said:
The PPP (Payment protection plan) is to protect them, not you.

PPP actually being PPI (Payment Protection Insurance) is not there for them at all, its there for you.

It is 100% optional, and a lenders offer of loan is NOT based on if you take PPI or not.

The amount you will pay for the monthly payments will normally be as follows:

LOANS LENDING (The actual loan) + PPI Premium + APR RATE / Term of borrowing.

If you pay the loan off early for one reason or another, you get the protection that you didnt use, back

Any questions, just ask