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Do I Need Loan Protection

Whilst you may already have a loan or credit card that carries loan protection, you may also be considering taking out a new loan in which the lender says you need loan insurance. If you are questioning "Do I need loan protection?" because the lender says you do, then you might be interested in the following information. On the other hand, if you are considering taking out a loan and are curious as to whether or not loan insurance would provide peace of mind in the event you lose your job or become too ill to work, you may find your answers here as well.

Do I Need Loan Protection If I Already Have It?

Some people already have some form of protection insurance that would blanket any loans or provide some cover if they lose their jobs or are out of work for any length of time due to illness. If you already have some kind of insurance that would help you make loan payments in these situations, then no, you don't need loan insurance on a new loan. In fact, this is considered to be 'redundancy' and would not leave you eligible for cover at the best of times. If the lender sells you loan protection and you made it clear you already have cover, this is considered to be mis sold payment protection and would make you eligible to file for a refund.

Do I Need Loan Protection If I Am New On the Job?

It is normal to worry about job stability when you are new on the job. You may be asking "Do I need loan protection if I am not sure whether or not my job will last?" Actually, you might want to consider opening up a savings account and placing money in there to save 'for a rainy day'. With the high cost of loan protection insurance you might actually find that you will make out better with a savings account that draws interest! Financial advisors suggest you take the money you would have spent on payment protection insurance and put it away in an account that will generate interest as not only will you be losing money when paying premiums, most often you will be paying interest on that amount as well!

Any time you ask yourself "Do I need loan protection?" you may want to consider whether or not there are any alternatives. Loan protection is extremely expensive, offers little in the way of cover as there are so many exclusions and actually has millions of UK consumers claiming mis sold PPI for just those reasons. You are not required to carry it by law, the lender cannot force you to carry it and you may be better off using that money to profit you instead of lining the pockets of your lender! If you are that insecure in your job that you feel you need some protection then perhaps now is not the time to be taking out a new loan anyway! In any case, if you have already purchased PPI and are still asking "Do I need loan protection?" the answer may lie in whether or not you are amongst the 13% who can draw benefits from it.

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