Are banks walking a loan insurance tightrope?
Loan insurance or payment protection insurance has been central to much scrutiny over the last few months, however a new report has revealed that some UK based banking institutions are reportedly earning anywhere up to 70% of the policy value, as a commission charge.
In what can only be described as another blow to consumer confidence, the research firm responsible for the study has described the findings as being both concerning and unfair. Even more alarming however, is the fact that some PPI plans are said to carry a rate of interest, which is actually higher than the cost of the loan plan.
A separate study has revealed that consumer awareness with regards to the actual workings of PPI is surprisingly sparse, and it is suggested that almost 80% of customers tied to a plan, do not actually require it. It is also believed that in some instances, loan insurance can add a staggering 15% to the loans APR value.
In related news, one of the UK’s best known money saving advice gurus has called upon all active PPI customers to take a closer look at their policies, as they may be entitled to a substantial refund, if the plan was mis-sold to them. For more information and to find out if you qualify for a refund, please visit www.moneysavingexpert.com/reclaim/ppi-loan-insurance
