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Loan Protection Loan

It is safe to assume when you go into a bank for a loan that there is something you need but cannot afford. At least that would be the conclusion most would draw. If that is the case, why then, would lenders choose to attach a loan to the loan you are asking for? Sound confusing? If so then you are not alone.

A Loan on Top of a Loan?

Many people are having trouble understanding what lenders are doing when they push a loan protection loan on them. Right now you may be scratching your head and wondering what on earth a loan protection loan is. Well, the short answer is that it relates to mis sold PPI. The more detailed explanation is that it is a way for lenders to make even more money off you than they would if you simply took the loan and paid the interest. Let us examine this for a moment.

Adding to Already High Payments

You go into a bank to take out a loan and everything is amortised over a set term of years. At this time the lender tells you that in order to be approved for the specific loan amount you must take out loan protection. Now the payments are calculated and you cannot afford them. The lender then fast talks you into an additional amount added to the top of the loan to cover the insurance bit.

Creating a Higher Profit for the Lender

Is it the lender's goal to make as much money off you as possible? To answer that question one need only look around and take notice that everyone seems to be out to make money today and many people are ruthless in the way they go about doing it. A loan protection loan is nothing more than a racket devised to create a higher profit margin for the lenders in question.

Not All Lenders Are Created Equal

Whilst it would be unfair to group all lenders together, there are some who are more questionable than others in terms of practices. These are the lenders who are being hit the hardest right now by mis sold payment protection claims and reclaims. They are also being fined quite significant amounts of money when any type of mis sold PPI case can be proven.

More Serious Offences Demand Stronger Action

In the case of a loan protection loan that was tacked on to the original loan unbeknownst to the borrower this is an even more serious offence and one that will generally result in the borrower taking action, often with the help of a PPI claims company such as Belmont Thornton.

If you have had a loan protection loan pushed on you then you may be eligible for a refund, provided that you can prove there was wrong doing or deception of some sort present. This is why Belmont Thornton provides their services to anyone who is looking to file a PPI refund without charging a pound in advance. We work on a no win, no fee* basis which means if you do not receive a PPI refund, we do not get paid. The goal is for everyone to come out on top and that is what we strive for.

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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website number 18273

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