How to Cancel Loan Protection
Loan protection, also known as payment protection insurance (PPI), is supposed to protect borrowers from the possibility of default by providing assistance with repayments in times of need. However, PPI policies rarely serve the best interest of the policyholder, as the majority of claims filed against PPI policies are denied by insurance companies that enforce strict eligibility guidelines before offering policy benefits. Despite these strict eligibility requirements, lenders continue to enrol applicants for insurance policies that they are not only ineligible for, but are also often not adequately informed of.
Explaining the Recent Increase in PPI Refunds
Although the Financial Ombudsman Service issued a report in 2007 stating that 95% of the PPI policies reviewed were mis-sold, 7 million additional policies are sold each year, and less than 15% of claims filed against PPI policies are honoured. Given such statistics, it is not surprising that many consumers are seeking PPI refunds and trying to learn how to cancel loan protection. In addition to recent studies published by prominent financial authorities, many borrowers are also beginning to scrutinise their loan statements more closely to avoid unfair fees. In the process of reviewing their monthly statements many borrowers are discovering PPI surcharges, which can lead them to ponder how to cancel loan protection.
How to Cancel Loan Protection without Defaulting on the Loan
One of the main concerns borrowers have when disputing any charges with their lender is the possibility of having a negative item filed on their credit report due to the controversy involved. By utilising the professional services of a PPI claim company you can have the claims process facilitated by a third party that knows how to cancel loan protection without affecting your credit score. Unfortunately, since many personal loans include the cost of the PPI policy (which is usually charged as a one-time premium) within the overall loan amount, it is impossible to stop making payments towards the policy since it is bundled with the loan repayments. Thus, you may want to contract professional assistance in having the terms of your loan renegotiated to exclude the mis-sold PPI policy, while also receiving a full PPI refund.
Why Are Lenders Motivated to Mis-Sell PPI?
Considering the fact that more consumers are learning how to cancel loan protection policies, and some high street banks have even been fined millions of pounds for PPI mis-selling, one would have to wonder why a lender would risk their reputation by mis-selling PPI. Unfortunately, while approximately 50,000 people are receiving PPI refunds with the help of companies that know how to cancel loan protection each year, this amounts to less than 1% of the 20 million PPI policies currently in existence. Furthermore, reports issued by the Financial Services Authority (FSA) indicate that some lenders earn the majority of their profit through PPI policy commissions. Luckily, you can begin receiving complete compensation for any funds allocated towards a mis-sold PPI policy by participating in a free consultation with The PPI Claim Company.
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