If you are in debt then that will mean that you have at some point taken out a loan (or several) – as all debt is is loans that you need to pay back. It then follows that the larger the loans you took out, the larger the amount of debt that you need to pay back – so you need to be careful in choosing your loans in the first place, and you need to ensure that you are aware of any hidden charges that might exist.
This is particularly true of something called loan payment protection insurance (also known as simply loan protection insurance). Many people are paying over the odds on loan payment protection insurance and are unaware that they are even doing so and this is something that is currently causing a lot of controversy in the media. If you fall into this category then you may be able to claim back some money, and if you don’t then you at least should be aware of the problem to avoid getting into trouble in future.
In theory loan repayment protection insurance is a good idea. As the name suggests this is insurance that you pay which covers you in the scenario that you should be unable to pay back your loan for financial reasons. However the problem is that like any insurance, loan repayment protection insurance varies in cost and in policy and the loan repayment protection insurance offered by the lenders themselves is often overly expensive while failing to cover you for many different scenarios. For example the loan repayment protection insurance that comes with most bank loans often won’t cover you in the case that you can’t pay due to an existing illness – which might make it useless for many borrowers.
You need to be able to shop around then for the loan repayment protection insurance with the best policy and the lowest price. However many banks miss-sell their insurance by including it in the cost of the loan and not being entirely forthright with their customers – meaning that people are paying for this insurance while not being aware of its existence. Furthermore, many lenders will include this insurance by simply adding it to the cost of the loan – and that means that not only are you paying over the odds, but also that the loan repayment protection insurance actually gains interest over time.
If you suspect you have been miss-sold loan repayment protection insurance then there are many legal bodies that can help you to claim back the money. Look to see if it has been explicitly stated anywhere in your contract or in your policy. At the same time, when taking out new loans be sure to ask whether they include this insurance. If so then you should tell them you are going to look elsewhere for private insurance with better rates and you don’t want it added to the loan. If they are inflexible then consider looking elsewhere for the loan.