If you were looking around to buy a new TV or a refrigerator then you would not take the first one that the salesperson tried to sell you, would you? You would of course shop around to find which shop gave you the best quality product and the lowest price. When you are considering buying loan cover then you should go about it the same way. The first person to try and get you to take out a policy is the high street lender. However this will be the dearest quote you will receive and often very little information will be given about the product you are buying. If you shop around with specialists in payment protection you can make savings of up to 80% on the premiums and get all the information you need.



Learning about the product is just as essential as checking for the lowest premiums. It is a lack of information that led to the majority of mis-selling and loan payment protection earning itself a bad name. There are certain exclusions that have to be checked against your personal circumstances, some providers will put many exclusions in the small print while others the bare few. You also have to check and compare when the provider would begin to payout and for how long.

Loan cover will usually payout somewhere between the 30th and 90th day, with some providers offering to backdate to the first day of unemployment or of you becoming unfit to attend work. You would then have between 12 and 24 months to recover or to find work again before the cover would cease. This eases and takes away the additional stress of not having an income and worrying about where you would find the money. If you cannot maintain your loan repayments then at the very least your credit score will be affected. The lender could also decide to take you to court and this means you might gain a County Court Judgement against you and possible means bailiffs would come to your home to take your possessions.

The cost of the policy with a standalone provider is based on how much of your loan or credit card payments you wish to cover and your age. All providers will allow you to insure up to a certain amount of your repayments each month and this would be the amount that you would receive when claiming.

High street lenders often do not know enough about loan cover to sell it and in the past the protection has been sold to those who could not possibly hope to claim on it such as those of retirement age and only in part time work. These are just two of the exclusions that can stop you from claiming and which have to be checked against your circumstances. You also have to be aware that when adding in protection alongside the borrowing with the high street lender very often they will calculate the protection over the entire loan and then add interest on top. This means that you not only pay interest on the amount you wish to borrow but also on the protection policy.